Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and...
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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 $62,000 12,750 37,500 5,000 5,000 Commercial $97,000 14,535 42,750 4,800 5,000 Required: Evaluate the performance of the two divisions assuming UEl uses residual income. (Enter your answers in dollars rounded to 1 decimal place.) RI of Consumer division RI of Commercial division Which division performed better
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