Evaluate the two divisions in terms of EVA

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Question - 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%

Required -

a. Evaluate the two divisions in terms of EVA.

b. It might be better to evaluate the CYBER division in terms of a balanced scorecard rather than just focusing on EVA. Is the statement true or false?

c. Given below is the list of performance evaluation measures. Identify if they relate to business process or to customer perspectives.

Reference no: EM132534289

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