Question: Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed

Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to benefit five years. R&D spending is made uniformly throughout the year. UEI has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows.

Consumer Commercial

Sales revenue 44,000 70,000

Divisional income 8,800 9,000

Divisional investment 33,000 36,000

Current liabilities 3,200 3,000

R&D 3,200 3,200

Required:

Evaluate the performance of the two divisions assuming UEI uses economic value added (EVA).(Enter your answers in dollars rounded to 1 decimal place.)

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