A Multinational Corporation Established a Division in a South American

Essay

A multinational corporation established a division in a South American country as a subsidiary corporation, with an initial investment in total assets of 13 million CU's (the local currency is CU's), which cost the company $3,250,000 Canadian at the time.The company sent an experienced manager to run the division, and gave her a target of 13% 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 20% ROI.You have been able to determine the following data pertaining to the subsidiary:
Required:
a.Calculate the subsidiary's income in CU's.
b.Calculate the subsidiary's return on investment in Canadian dollars.
c.Calculate the subsidiary's residual income in Canadian dollars.