Reference no: EM132586775
Salsa Grocery has two divisions. One division, STORES, sells groceries through traditional grocery stores. The second division, CYBER, was formed two years ago and sells groceries through an online grocery ordering service. Data for the past year for the two divisions are as follows.
STORES CYBER
Total assets$120,000,000 $15,000,000
Current liabilities 4,500,000 2,500,000
Net income (loss) 10,000,000 1,000,000
Weighted-average cost of capital 8% 10%
Question a. Evaluate the two divisions in terms of EVA.
Question b. It might be better to evaluate the CYBER division in terms of a balanced scorecard rather than just focusing on EV
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