Mineral Waters Ltd. operates three divisions that process and bottle sparkling mineral water. The historical-cost accounting system reports the following data for 2013:

Mineral Waters estimates the useful life of each plant to be 12 years with a zero terminal disposal price. The straight-line amortization method is used. At the end of 2013, the Calistoga plant is 10 years old, the Alpine Springs plant is 3 years old, and the Rocky Mountains plant is 1 year old.
An index of construction costs of plants for mineral water production for the 10-year period that Mineral Waters has been operating (2003 year-end = 100) is:

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 (operating income to total assets) ratio of each division using historical- cost measures. Comment on the results.
2. Use the approach in Exhibit 24-3 (p. 977) to compute the ROI of each division, incorporating current-cost estimates as of 2013 for amortization and fixed 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?

Calistoga Division Alpine Springs Division Rocky Mountains Division Revenues S600,000 Operating costs (excluding amortizati Plant amortization Operating income Current assets Fixed assets plant Total assets on 0 $1,944,000 2011 2012 2013 2003 2010 149 160 170 100 136