A multinational corporation established a division in Ireland as a subsidiary corporation, with an initial investment in total assets of 13 million €'s, which cost the company $19,240,000 Canadian at the time.The company sent an experienced manager to run the division, and gave her a target of 12% required rate of return, promising a bonus if this was met and/or exceeded.After one year, the subsidiary manager was pleased to report a 15% ROI.You have been able to determine the following data pertaining to the subsidiary:
Required:
a.Calculate the subsidiary's income in €'s.
b.Calculate the subsidiary's return on investment in Canadian dollars.
c.Calculate the subsidiary's residual income in Canadian dollars.

Question

A multinational corporation established a division in Ireland as a subsidiary corporation, with an initial investment in total assets of 13 million €'s, which cost the company $19,240,000 Canadian at the time.The company sent an experienced manager to run the division, and gave her a target of 12% required rate of return, promising a bonus if this was met and/or exceeded.After one year, the subsidiary manager was pleased to report a 15% ROI.You have been able to determine the following data pertaining to the subsidiary:
  Required:
a.Calculate the subsidiary's income in €'s.
b.Calculate the subsidiary's return on investment in Canadian dollars.
c.Calculate the subsidiary's residual income in Canadian dollars.

Quizplus · Accepted Answer

The Answer of A multinational corporation established a division in Ireland as a subsidiary corporation, with an initial investment in total assets of 13 million €'s, which cost the company $19,240,000 Canadian at the time.The company sent an experienced manager to run the division, and gave her a target of 12% required rate of return, promising a bonus if this was met and/or exceeded.After one year, the subsidiary manager was pleased to report a 15% ROI.You have been able to determine the following data pertaining to the subsidiary:
  Required:
a.Calculate the subsidiary's income in €'s.
b.Calculate the subsidiary's return on investment in Canadian dollars.
c.Calculate the subsidiary's residual income in Canadian dollars.

A Multinational Corporation Established a Division in Ireland as a Subsidiary