Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financialinformation (in thousands of dollars) for the first year of business follows:Sales revenueIncomeDivisional assets (beginning of year)Current liabilities (beginning of year)RAD expendituresCarolinas$1,6001601,000240800Northeast$5,500Complete this question by entering your answers in the tabs below.4321,500240720R&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 economic value added (EVA).a-2. Which division had the better performance?

Economic value added is calculated by deducting cost of capital from its operating profit. It is a…

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 Carolinas $1,600 160 1,000 246 800 Northeast $5,600 432 1,500 240 120 Divisional assets (beginning of year) Current liabilities (beginning of year) RAD expenditures R&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 economic value added (EVA). a-2. Which division had the better performance? Complete this question by entering your answers in the tabs below.

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 Carolinas $1,600 160 1,000 246 800 Northeast $5,600 432 1,500 240 120 Divisional assets (beginning of year) Current liabilities (beginning of year) RAD expenditures R&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 economic value added (EVA). a-2. Which division had the better performance? Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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