The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $36million and having a four-year expected life, after which the assets can be salvaged for $7.2 million, In addition, the division has $36 million in assets that are not depreciable. After four years, the division will have $36 million avoilable from these nondepreciable assets. This means that the division has invested $72 million in assets with a salvage value of $43.2 million. Annual operating cash flows are $12million. In computing ROI, this division uses end-of-year asset volues in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that the company uses an 8 percent cost of capital. Required: a. Compute residual income, using net book value for each year. b. Compute residual income, using gross book value for each year. Note: For all the requirements, enter your answers in thousands of dollars. Negative amounts should be indicated by a minus sign. Exeter Division of Wetherby Labs acquired an asset with a cost of $800,000 and a four-year life. The cash flows from the asset. considering the effects of inflation, were scheduled as follows: The cost of the asset is expected to increase ot a rate of 5 percent per year compounded each year. Performance meosures are based on beginning-of-year gross book values for the investment bose. Ignore toxes. Assume that the company uses a 12 percent cost of capital. Required: a. What is the residual income for each year of the asset's life. using o historical cost approsch? b. What is the residual income for each year of the asset's life if both the investment bose and depreciation are determined by the current cost of the asset ot the start of each year? Note: For all the requirements, Negative amounts should be indicated by a minus sign