A Multinational Corporation Established a Division in Ireland as a Subsidiary

question 34

Essay

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.

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Definitions:

Motor Nerves

Nerves that transmit impulses from the brain or spinal cord to muscles or glands, initiating movement or action.

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord.

Glands

Organs in the body that secrete hormones or other substances directly into the blood or onto a body surface.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column, transmitting neural signals between the brain and the rest of the body.