Nature's Elixir Corporation operates three divisions that process and bottle natural fruit juices. The historical-cost accounting system reports the following information for 2015:

Nature's Elixir 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 2015, 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 Elixir has been operating (2005 year-end = 100) is:
2005 2012 2014 2015
100 ............ 136 ............. 160 ............. 170
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 ratio (operating income to total assets) of each division using historical-cost measures. Comment on the results.
2. Use the approach in Exhibit 22-3 to compute the ROI of each division, incorporating current cost estimates as of 2015 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?

Passion Fruit Kiwi Fruit Division Mango Fruit Revenues Operating costs (excluding plant depreciation) Plant depreciation Operating income Current assets Long-term assets-plant Total assets Division S1,000,000 600,000 140,000 S 260,000 S 400,000 280,000 680,000 Division $1,400,000 S 2,200,000 1,200,000 240,000 440,000 760,000 500,000 S 600,000 ,640,000 $2,300,000 3,240,000 760,000 200,000 1,800,000