The Shamrock Corporation Manufactures Flower Pots in Canada and Ireland

Essay

The Shamrock Corporation manufactures flower pots in Canada and Ireland. The operations are organized as decentralized divisions. The following information is available for the year just ended:

The exchange rate at the time of Shamrock's investment (the end of the previous year) in Ireland was $1.35 Canadian to 1.00 Euro. During the year, the Euro weakened steadily in value and the exchange rate at the end of the current year was 1.24 Canadian = $1.00 Euro. The average exchange rate during the year was 1.28 Canadian = $1.00 Euro.
Required:
a. Calculate the Canadian Division's ROI for last year based on dollars.
b. Calculate the Irish Division's ROI for last year based on Euros.
c. Which of Shamrock's two divisions earned the better ROI? Explain your answer, complete with supporting calculations showing the Irish Division ROI in Canadian dollars.