Concept explainers
Multinational firms, differing risk, comparison of profit,
- 1. Translate the French and Australian information into dollars to make the divisions comparable. Find the after-tax operating income for each division and compare the profits.
Required
- 2. Calculate ROI using after-tax operating income. Compare among divisions.
- 3. Use after-tax operating income and the individual cost of capital of each division to calculate residual income and compare.
- 4. Redo requirement 2 using pretax operating income instead of net income. Why is there a big difference, and what does this mean for performance evaluation?
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Horngren's Cost Accounting, Student Value Edition (16th Edition)
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