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I just need the answer for D Yeach Division has total assets (net of accumulated depreciation) of $462.000 at the beginning of year 1 ,
I just need the answer for D
Yeach Division has total assets (net of accumulated depreciation) of $462.000 at the beginning of year 1 , One of the assets is a machine that has a net book value of $47,880. Expected divisional income in year 1 is $55,440 including $2.940 in income generated by the machine (after depreciation). Veach's cost of capital is 10 percent. Veach is considering disposing of the asset today (the beginning of year 1). Required: o. Veach computes ROI using beginning of-the-year net assets. What will the divisional ROI be for year 1 assuming Veach retains the asset? b. What would divisional ROI be for year 1 assuming Veach disposes of the asset for its book value and there is no gain or loss on the sale? Note: Enter your answer os a percentage rounded to 1 decimol place (i.e., 32.1). c. Veach computes residual income using beginning-of the-year net assets. What will the divisional residual income be for year 1 assuming Veach retains the asset? d. What would divisional residual income be for year 1 assuming Veach disposes of the asset for its book value and there is no gain or loss on the sale Step by Step Solution
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