View previ Exercise 14-33 (Algo) Comparing Business Units Using Economic Value Added (EVA) (LO 14-4) 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. Print Sales revenue Consumer $60,000 13,300 Commercial $94,000 13,860 References 37,000 42,000 Divisional income. Divisional investment Current liabilities R&D 4,800 4,600 4,800 4,800 Required: Evaluate the performance of the two divisions assuming UEI uses economic value added (EVA). (Enter your answers in thousands of dollars rounded to 1 decimal place.) EVA of Consumer division $9,230.0 $9,240.0 EVA of Commercial division Which division performed better? The Consumer division performed better 2 7 points
View previ Exercise 14-33 (Algo) Comparing Business Units Using Economic Value Added (EVA) (LO 14-4) 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. Print Sales revenue Consumer $60,000 13,300 Commercial $94,000 13,860 References 37,000 42,000 Divisional income. Divisional investment Current liabilities R&D 4,800 4,600 4,800 4,800 Required: Evaluate the performance of the two divisions assuming UEI uses economic value added (EVA). (Enter your answers in thousands of dollars rounded to 1 decimal place.) EVA of Consumer division $9,230.0 $9,240.0 EVA of Commercial division Which division performed better? The Consumer division performed better 2 7 points
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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