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.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 5PA: Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an...

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