00 8 12.5 points The Ste. Marie Division of Pacific Media Corporation Just started operations. It purchased depreciable assets costing $95 million and having a four-year expected life, after which the assets can be salvaged for $19 million. In addition, the division has $95 million in assets that are not depreciable. After four years, the division will have $95 million available from these nondepreciable assets. This means that the division has invested $190 million in assets with a salvage value of $114 million. Annual depreciation is $19 million. Annual operating cash flows are $50 million. In computing ROI, this division uses end-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that the company uses a 12 percent cost of capital. Required: a. Compute residual Income, using net book value for each year. b. Compute residual Income, using gross book value for each year. (Enter your answers in thousands of dollars.) Answer is complete but not entirely correct. Residual Income Net Book Gross Book Value Value Year 1 69 18 Year 2 $ 20 XS SS 16 x 16 Year 3 Year 4 69 69 23 S 16 x $ 27 S 16 x