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The Caribbean Division of Mega-Entertainment Corporation just started operations. It purchased depreciable assets costing exist30 million and having a four-year expected life, after which the

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The Caribbean Division of Mega-Entertainment Corporation just started operations. It purchased depreciable assets costing exist30 million and having a four-year expected life, after which the assets can be salvaged for exist6 million. In addition, the division has exist30 million in assets that are not depreciable. After four years, the division will have exist30 million available from these non-depreciable assets. This means that the division has invested exist60 million in assets with a salvage value of exist36 million. Annual depreciation is exist6 million. Annual operating cash flows are exist15 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 all cash flows increase 10 percent at the end of each year. This has the following effect on the assets replacement cost and annual cash flows: Depreciation is as follows Note that "accumulated" depreciation is 10 percent of the gross book value of depreciable assets after one year, 20 percent after two years, and so forth. (a) Compute ROI using historical cost, net book value and gross book value. (Do not round intermediate calculations. Round your answers to 1 decimal place.)

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