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PLEASE ANSWER QUESTIONS 1-3 Requirements 1. Compute the ROI ratio (operating income to total assets) of each division using historical-cost measures. Comment on the results.
PLEASE ANSWER QUESTIONS 1-3
Requirements 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 outlined to compute the ROI of each division, incorporating current-cost estimates as of 2020 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? Data table Construction index Natural Bounty 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 2020, the passion fruit plant is 10 years old, the kiwi fruit plant is 4 years old, and the mango fruit plant is 2 years old. An index of construction costs over the 10 -year period that Natural Bounty has been operating (2010 year-end =100) is as follows
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