The Ste Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $40 million and having a four-year expected life, after which the assets can be salvaged for $8 million. In addition, the division has $40 million in assets that are not depreciable. After four years, the division will have $40 million available from these nondepreciable assets. This means that the division has invested $80 million in assets with a salvage value of $48 million Annual depreciation is $8 million Annual operating cash flows are $25 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. End of Year 1 2 3 Replacement Cost $80,000,000 1.1$80,000,000 $88,000,000 X 1.1 - $96,800,000 Annual Cash Flow $25,000,000 1.1 - 827,500,000 $27,500,000 1.1 - $30,250,000 Ete. Etc. Depreciation is as follows. Year 1 2 3 For the Year $ 8,800,000 9,680,000 10,648.000 11,712,800 "Accumulated" $ 8,800,000 ( 108 * $88,000,000) 19,360,000 (20 96,800,000) 31,944,000 46,851,200 Note that "accumulated depreciation is 10 percent of the gross book value of depreciable assets after one year, 20 percent after two vears, and so forth 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 Required: a. & b. Compute ROI sing historical cost, net book value and gross book value c. & d. Compute Rol using current cost, net book value and gross book value. COM Complete this question by entering your answers in the tabs below. ant ances Reg A and B Reg Cand D Compute ROI using historical cost, net book value and gross book value (Enter your answers as a percentage rounded to 1 decimal place (1.e., 32.1). Historical Cost Year 1 Year 2 Year 3 Year 4 ROI Net Book Value Gross Book Valuo % % % % % % % Complete this question by entering your answers in the tabs below. Reg A and B SR Reg C and D + Compute ROI using current cost, net book value and gross book value. (Enter your answers as a percentage rounded to 1 decimal place (1.e., 32.1).) ces Current Cost Year 1 Year 2 Year 3 Year 4 ROI Net Book Value Gross Book Value % %6 96 % %% % % %