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The filled in answers are correct - need help finding the Economic rate of return, book depreciation, book income and book rate of return. Please
The filled in answers are correct - need help finding the Economic rate of return, book depreciation, book income and book rate of return.
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Consider an asset with the following cash flows: Cash flows ($ millions) Year o -51 Year 1 22.10 Year 2 20.40 Year 3 18.70 The firm uses straight-line depreciation. Thus, for this project, it writes off $17 million per year in years 1, 2, and 3. The discount rate is 10%. a. Complete the following table. b. Does the economic depreciation equal the book depreciation? c. Is the book rate of return the same in each year? d. Is the project's book profitability its true profitability? Complete this question by entering your answers in the tabs below. Req a Reqb to d Complete the following table. (Leave no cells blank - be certain to enter "0" wherever required. Round your cash flow, economic income, economic rate of return, book income, and book rate of return answers to 2 decimal places. All other answers should be rounded to the nearest whole number. Input the rates of return as decimal values, not percents and other answers in millions not in dollars. Negative answers should be indicated with a minus sign.) Show less Year 1 22.10 Year 3 18.70 17 51 34 (17) 17 Year 2 20.40 34 17 (17) 17 Cash flow PV at start of year PV at end of year Change in PV Economic depreciation Economic income Economic rate of return Book depreciation Book income Book rate of return (17) 17 1.70 5.10 3.40Step by Step Solution
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