Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Divisional assets (beginning of year) Current liabilities (beginning of year) R&D expenditures a Carolinas $ 1,100 190 Northeast $ 4,600 312 1,000 190 1,500 190 550 470 aR&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income. a-2. Which division had the better performance? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income. Note: Enter your answers in thousands of dollars rounded to 1 decimal place. Divisions Residual Income Carolinas $115,000.0 $ Northeast 314,250.0 Req A1 Req A2 >
Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Divisional assets (beginning of year) Current liabilities (beginning of year) R&D expenditures a Carolinas $ 1,100 190 Northeast $ 4,600 312 1,000 190 1,500 190 550 470 aR&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income. a-2. Which division had the better performance? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income. Note: Enter your answers in thousands of dollars rounded to 1 decimal place. Divisions Residual Income Carolinas $115,000.0 $ Northeast 314,250.0 Req A1 Req A2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial
information (in thousands of dollars) for the first year of business follows:
Sales revenue
Income
Divisional assets (beginning of year)
Current liabilities (beginning of year)
R&D expenditures a
Carolinas
$ 1,100
190
Northeast
$ 4,600
312
1,000
190
1,500
190
550
470
aR&D is assumed to benefit two periods. All R&D is spent at the beginning of the year.
Required:
a-1. Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income.
a-2. Which division had the better performance?
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req A1
Req A2
Evaluate the performance of the two divisions assuming Lasky Manufacturing uses residual income.
Note: Enter your answers in thousands of dollars rounded to 1 decimal place.
Divisions
Residual
Income
Carolinas
$115,000.0
$
Northeast
314,250.0
Req A1
Req A2 >
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