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:

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:

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.
2. 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.
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?

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Passion Fruit Division Kiwi Fruit Division $1,800,000 Mango Fruit Division Revenues $1,300,000 $2,400,000 Operating costs (excluding plant depreciation) Plant depreciation Operating income 550,000 270,000 $ 480.000 1,050,000 175,000 575,000 900,000 290,000 $1,210,000 $ 425,000 540,000 $ 965,000 600,000 1,575,000 $2,175,000 $ 700,000 3,190,000 $3,890,000 Current assets Long-term assets-plant Total assets 2007 2014 2016 2017 100 120 185 200