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. Sales revenue Divisional income Divisional investment Current liabilities R&D Consumer $22,000 3,850 27,500 1,000 1,000 Commercial $37,000 EVA of Consumer division EVA of Commercial division Which division performed better? 3,885 27,750 800 1,000 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.) Answer is complete but not entirely correct. $ 825.0 $ 810.5 X The Consumer 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. 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. Sales revenue Divisional income Divisional investment Current liabilities R&D Consumer $22,000 3,850 27,500 1,000 1,000 Commercial $37,000 EVA of Consumer division EVA of Commercial division Which division performed better? 3,885 27,750 800 1,000 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.) Answer is complete but not entirely correct. $ 825.0 $ 810.5 X The Consumer division performed better ✓
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
Section: Chapter Questions
Problem 11E: Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant,...
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