Managerial Accounting for Subsidiaries
The following data summarize the operating performance of
your company’s wholly owned Canadian subsidiary for 2009 to 2011. The cost of
capital for this subsidiary is 10 percent.
(000,000)
2009 2010 2011
Subsidiary Net Income $14.0 $14.3 $14.4
Total Assets in Subsidiary 125 130 135
Return on Net Investment* in Subsidiary 20% 22% 24%
* Net Investment is calculated as total assets less all
liabilities
Required: Critically evaluate the performance of this
subsidiary.





