ROI performance measures based on historical cost and current cost. Nature's Juice Corporation operates three divisions that process and bottle natural fruit juices. The historical-cost accounting system reports the following information for 2017:

	Passion Fruit Division		Kiwi Fruit Division		Mango Fruit Division
Revenues	$1,300,000		$1,800,000		$2,400,000
Operating costs (excluding plant depreciation)	550,000		1,050,000		900,000
Plant depreciation	270,000		175,000		290,000
Operating income	$ 480,000		$ 575,000		$1,210,000
Current assets	$ 425,000		$ 600,000		$ 700,000
Long-term assetsplant	540,000		1,575,000		3,190,000
Total assets	$ 965,000		$2,175,000		$3,890,000

Nature's Juice 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 2017, 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 Juice has been operating (2007 year-end = 100) is as follows:

2007	2014	2016	2017
100	120	185	200

Given the high turnover of current assets, management believes that the historical-cost and current-cost measures of current assets are approximately the same.

1. Compute the ROI ratio (operating income to total assets) of each division using historical-cost measures.

Comment on the results.

1. Use the approach in Exhibit 23-2 (page 902) to compute the ROI of each division, incorporating current cost estimates as of 2017 for depreciation expense and long-term assets. Comment on the results.
2. What advantages might arise from using current-cost asset measures as compared with historicalcost measures for evaluating the performance of the managers of the three divisions?