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NEW COMPANY ACQUIRED AN ASSET WITH A VALUE OF $1,250,000 AND A 4 YEAR LIFE. YEARLY CASH FLOWS ARE AS FOLLOWS YEARL 1 2
NEW COMPANY ACQUIRED AN ASSET WITH A VALUE OF $1,250,000 AND A 4 YEAR LIFE. YEARLY CASH FLOWS ARE AS FOLLOWS YEARL 1 2 3 4 526,000 550,000 589,000 625,000 THE COST OF THE ASSET IS EXPECTED TO INCREASE AT A RATE OF 12 PERCENT EACH YEAR COMPOUNDED EACH YEAR. ASSET BASE IS AT END OF EACH YEAR VALUES. WHAT IS THE ROI FOR EACH YEAR OF ASSETS LIFE USING THE HISTORICAL COST, NET BOOK VALUE APPROACH? WHAT IS THE ROI FOR EACH YEAR OF THE ASSETS LIFE IF BOTH INVESTMENT BASE AND DEPRECIATION ARE DETERMINED BY THE CURRENT COST, NET BOOK VALUE OF THE ASSET AT THE END OF EACH YEAR?
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