Question
The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $49.0 million and having a four-year expected life, after
The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $49.0 million and having a four-year expected life, after which the assets can be salvaged for $9.8 million. In addition, the division has $49.0 million in assets that are not depreciable. After four years, the division will have $49.0 million available from these nondepreciable assets. This means that the division has invested $98.0 million in assets with a salvage value of $58.8 million. Annual depreciation is $9.8 million. Annual operating cash flows are $20.8 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
. Required: a. & b. Compute ROI, using net book value and gross book value for each year. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)
ROI
net book value gross book value
Year 1 12.4% 11.1%
year 2
year 3
year 4
I cant figure the rest out I am having problems with the calculations
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