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Veach Division has total assets ( net of accumulated depreciation ) of $ 4 6 2 , 0 0 0 at the beginning of year

Veach Division has total assets (net of accumulated depreciation) of $462,000 at the beginning of year 1. One of the assets is a
machine that has a net book value of $43,260. Expected divisional income in year 1 is $55,440 including $2,940 in income generated
by the machine (after depreciation). Veach's cost of capital is 10 percent. Veach is considering disposing of the asset today (the
beginning of year 1).
Required:
a. Veach computes ROI using beginning-of-the-year net assets. What will the divisional ROI be for year 1 assuming Veach retains the
asset?
b. What would divisional ROI be for year 1 assuming Veach disposes of the asset for its book value and there is no gain or loss on the
sale?
Note: Enter your answer as a percentage rounded to 1 decimal place (i.e.,32.1).
c. Veach computes residual income using beginning-of-the-year net assets. What will the divisional residual income be for year 1
assuming Veach retains the asset?
d. What would divisional residual income be for year 1 assuming Veach disposes of the asset for its book value and there is no gain or
loss on the sale?
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