A division is considering the acquisition of a new asset that will cost $2,870,000 and have a cash flow of $760,000 per year for each of the four years of its life. Depreciation is computed on a straight-line basis with no salvage value. Ignore taxes.

Required:

a. & b. What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation? What is the residual income each year if the cost of capital is 8 percent? (Enter "ROI" answers as a percentage rounded to 1 decimal place (i.e., 32.1). Negative amounts should be indicated by a minus sign.)

Year	Investment Base	ROI		Residual Income
1	$2,870,000	1.5	%	$19,540
2	2,152,500	10.4	%	49,675
3	1,509,500		%
4			%