15.3 As the manager of Lene division of Elenia SpA, you are interested in determining the division’s return on investment. As division manager you have no control over financing assets, but you control acquisition and disposition of assets.

The division controller has given you the following data for the division to aid you in calculating return on investment:

Accounting period 1 January–31 December 2004 (amounts in thousands of euro)

Total assets (1 January) 800 Total assets (31 December) 1,050 Non-current liabilities (1 January) 150 Non-current liabilities (31 December) 192 Equity (1 January) 556 Equity (31 December) 606 EAT 108 Interest expense on non-current liabilities 8.4 Tax rate = 30%

Which method would be most appropriate for calculating the division’s return on investment? Why? Using this method, what is the return on investment for 2004?