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

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. UEl 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. Sales revenue Divisional income Divisional investment Current liabilities R&D Consumer $54,000 11,500 35,500 4,200 4,200 Commercial $85,000 11,925 39,750 4,000 4,200 Required: Evaluate the performance of the two divisions assuming UEl uses economic value added (EVA). (Enter you answers in dollars rounded to 1 decimal place.) EVA of Consumer division EVA of Commercial division Which division performed better? 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. UEl 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. Sales revenue Divisional income Divisional investment Current liabilities R&D Consumer $54,000 11,500 35,500 4,200 4,200 Commercial $85,000 11,925 39,750 4,000 4,200 Required: Evaluate the performance of the two divisions assuming UEl uses economic value added (EVA). (Enter you answers in dollars rounded to 1 decimal place.) EVA of Consumer division EVA of Commercial division Which division performed better

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!