Nature's Elixir Corporation operates three divisions that process and bottle natural fruit juices. The historical-cost accounting system reports the following information for 2015:

Nature's Elixir estimates the useful life of each plant to be 12 years, with no terminal disposal value. The straight-line depreciation method is used. At the end of 2015, the Passion Fruit plant is 10 years old, the Kiwi Fruit plant is 3 years old, and the Mango Fruit plant is 1 year old. An index of construction costs over the 10-year period that Nature's Elixir has been operating (2005 year-end = 100) is:
2005 2012 2014 2015
100 ............ 136 ............. 160 ............. 170
Given the high turnover of current assets, management believes that the historical-cost and current-cost measures of current assets are approximately the same.
Required
1. Compute the ROI ratio (operating income to total assets) of each division using historical-cost measures. Comment on the results.
2. Use the approach in Exhibit 22-3 to compute the ROI of each division, incorporating current cost estimates as of 2015 for depreciation expense and long-term assets. Comment on the results.
3. What advantages might arise from using current-cost asset measures as compared with historical-cost measures for evaluating the performance of the managers of the three divisions?

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Passion Fruit Kiwi Fruit Division Mango Fruit Revenues Operating costs (excluding plant depreciation) Plant depreciation Operating income Current assets Long-term assets-plant Total assets Division S1,000,000 600,000 140,000 S 260,000 S 400,000 280,000 680,000 Division $1,400,000 S 2,200,000 1,200,000 240,000 440,000 760,000 500,000 S 600,000 ,640,000 $2,300,000 3,240,000 760,000 200,000 1,800,000