Nobles Corporation Provided the Following Segment Margin Income Statement for Two

Essay

Nobles Corporation provided the following segment margin income statement for two of its divisions: East and West. Nobles' actual weighted-average cost of capital is 10% and its tax rate is 30%.The East division balance sheet showed $300,000 of assets ($60,000 current and $240,000 long-term) and $320,000 of liabilities ($120,000 current and $200,000 long-term).The West division reported $360,000 of assets ($80,000 current and $280,000 long-term) and $260,000 of liabilities ($60,000 current and $200,000 long-term).
Required:
a.Calculate the economic value added for each division.
b.Which of the two managers will be rated higher on performance? Why?