Answer:
Consumer EVA 7, 133.00
Commercial EVA 7,090.50
<u>Both are profitable</u>
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Explanation:
The EVA (economic value added) is the result from subtracting the cost of capital of the investment to their divisional income. This will determinate if the division increase the company's capital or destroyed (as it return less than optimal/desired)
Consumer Income 11,500
Investment: 35,500 + 4,200 = 39,700
EVA: 11,500 - 39,700 x 11% = 7, 133
Commercial Income 11,925
Investment: 39,750 + 4,200 = 43,950
EVA: 11,925 - 43,950 x 11% = 7090.5
Both division are profitable as they generate more income than the cost of the investment