Multinational firms, differing risk, comparison of profit, ROI and RI. Zzwuig Multinational, Inc. has divisions in the United States, Germany, and New Zealand. The U.S. division is the oldest and most established of the three, and has a cost of capital of6%. The German division was started three years ago when the exchange rate for euros was 1 euro = $1.25. Although it is a large and powerful division of Zzwuig Inc., its cost of capital is 10%. The New Zealand division was started this year, when the exchange rate was 1 New Zealand Dollar (NZD) = $0.64. Its cost of capital is 13%. Average exchange rates for the current year are 1 euro ' $1.32 and 1 NZD = $0.67. Other information for the three divisions includes:

1. Translate the German and New Zealand information into dollars to make the divisions comparable. Find the after-tax operating income for each division and compare the profits.

2. Calculate ROI using after-tax operating income. Compare among divisions.

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States Germany New Zealand 9,072,917 NZD United 9,856,000 euros 5,200,000 euros 3,600,000 euros Long tem assets $14,845,000 Operating revenues Operating expenses 4,800,000 NZD $10,479,000 $ 7,510,000 3,500,000 NZD 30% 40% Income tax rate 20%