The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 401 Weeks Ago, 1 Day Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
25.   ROI computations comparing net and gross book value. The following information relates to the operating performance of two divisions of World Electronics, Inc., for last year.
Â
![]()
Â
U.S.
Division
Â
Australian Division
Â
![]()
Operating             Profit...........................................................................................................   $  3,000,000    $  4,000,000 Total  Assets  (at  gross  acquisition  cost) ................................................................                   20,000,000     50,000,000
Total Assets (net of accumulated  depreciation)..................................................  15,000,000        15,000,000
Â
![]()
Â
a.   Compute the return on investment (ROI) of each division, using total assets at gross book value as the investment base.
b.   Compute the ROI of each division, using total assets net of accumulated depreciation (net book value) as the investment base.
c.   Which of the two measures do you think gives the better indication of operating per- formance? Explain your reasoning.
Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â----------- Th-----------ank----------- Yo-----------u f-----------or -----------usi-----------ng -----------our----------- we-----------bsi-----------te -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n. -----------Ple-----------ase----------- pi-----------ng -----------me -----------on -----------cha-----------t I----------- am----------- on-----------lin-----------e o-----------r i-----------nbo-----------x m-----------e a----------- me-----------ssa-----------ge -----------I w-----------ill-----------