The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $39 million and having a four-year expected life, after which the assets can be salvaged for $7.8 million. In addition, the division has $39 million in assets that are not depreciable. After four years, the division will have $39 million available from these nondepreciable assets. This means that the division has invested $78 million in assets with a salvage value of $46.8 million. Annual depreciation is $7.8 million. Annual operating cash flows are $20 million. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that the division uses beginning-of-year asset values in the denominator for computing ROI.

Required:

a. & b. Compute ROI, using net book value and gross book value

	ROI
	Net Book Value		Gross Book Value
Year 1		%		%
Year 2		%		%
Year 3		%		%
Year 4		%		%