
- 1. Calculate ROI for each division using net book value of total assets. Required
- 2. Using the technique in Figure 23-2, compute ROI using current-cost estimates for long-term assets and
depreciation expense. The construction cost index for 2017 is 122. Estimated useful life of operational assets is 15 years. - 3. How does the choice of long-term asset valuation affect management decisions regarding new capital investments? Why might this choice be more significant to the St. Louis division manager than to the New Orleans division manager?

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Chapter 23 Solutions
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