Required: a-1. Evaluate the performance of the two divisions assuming DMI uses economic value added. (Enter answers in thousands of dollers. Round your answers to 1 decimal place.)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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a-2.  which division had the better performance?

east or west

Back Mountain Industries (BMI) has two divisions: East and West BMI has a cost of capital of 20 percent. Selected financial information
(in thousands of dollars) for the first year of business follows.
East
$3,600
655
1,65e
330
West
Sales revenue
$7,600
780
2,600
330
Income
Investnent (beginning of year)
(Current Liabilities (beginning of year)
RED expenditures
1, 150
1,e50
*R&D is assumed to benefit two periods. All RSD is spent at the beginning of the year.
Required:
a-1. Evaluate the performance of the two divisions assuming BMI uses economic value added. (Enter answers in thousands of dollars.
Round your answers to 1 decimal place.)
Divisions
EVA
East
West
a-2. Which division had the better performance?
East
Transcribed Image Text:Back Mountain Industries (BMI) has two divisions: East and West BMI has a cost of capital of 20 percent. Selected financial information (in thousands of dollars) for the first year of business follows. East $3,600 655 1,65e 330 West Sales revenue $7,600 780 2,600 330 Income Investnent (beginning of year) (Current Liabilities (beginning of year) RED expenditures 1, 150 1,e50 *R&D is assumed to benefit two periods. All RSD is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming BMI uses economic value added. (Enter answers in thousands of dollars. Round your answers to 1 decimal place.) Divisions EVA East West a-2. Which division had the better performance? East
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