The Larsone Company uses the straight-line method with no residual value to depreci- ate its property, plant, and equipment. On its 2000 income statement, Larsone reported depreciation expense of $15,000 and net income of $20,000. On its December 31, 2000 balance sheet, Larsone reported the following amounts:

Property, plant, and equipment $150,000 Less: Accumulated depreciation (30,000)

Property, plant, and equipment (net) $120,000 Required: (1) Compute the average age of Larsone’s property, plant, and equipment. (2) Compute the average life of Larsone’s property, plant, and equipment. (3) If a user decides the average life of Larsone’s assets should be 2 years shorter, compute Larsone’s revised depreciation expense for 2000. (4) Compute Larsone’s return on assets for 2000

(a) using its reported amounts, and

(b) using the 2-year shorter life. Use the ending amount of property, plant, and equipment (net) as the total assets and ignore income taxes.