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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 ✓

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 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.) EVA of Consumer division EVA of Commercial division Which division performed better? > Answer is complete but not entirely correct. $825.0 X $810.5 x The Consumer division performed better
Transcribed Image Text: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 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.) EVA of Consumer division EVA of Commercial division Which division performed better? > Answer is complete but not entirely correct. $825.0 X $810.5 x The Consumer division performed better
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