Book Value of Fixed Assets

Cannington, Inc., designs, manufactures, and markets personal computers and related software. The following information was taken from a recent annual report of Cannington industries:

Property, Plant, and Equipment:
	Current Year		Preceding Year
Land and buildings	$682,240		$395,699
Machinery, equipment, and internal-use software	648,128		511,680
Office furniture and equipment	102,336		88,691
Other fixed assets related to leases	825,510		620,838
Accumulated depreciation and amortization	866,445		723,174

a. Compute the book value of the fixed assets for the current year and the preceding year.

Current year book value	$
Preceding year book value	$

b. Would you normally expect the book value of fixed assets to increase or decrease during the year?

Fixed Asset Turnover Ratio

Master's Communications is a telecommunications company. Master's balance sheet disclosed the following information regarding fixed assets:

	Year 2 (in millions)		Year 1 (in millions)
Plant, property, and equipment	$228,400		$217,997
Less accumulated depreciation	137,404		130,095
	$90,996		$87,902

Master's revenue for Year 2 was $116,284 million. Assume the fixed asset turnover for the telecommunications industry averages approximately 1.32.

a. Determine Master's fixed asset turnover ratio for Year 2. Round to two decimal places.