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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 $ at the beginning of year One of the assets is a
machine that has a net book value of $ Expected divisional income in year is $ including $ in income generated
by the machine after depreciation Veach's cost of capital is percent. Veach is considering disposing of the asset today the
beginning of year
Required:
a Veach computes ROI using beginningoftheyear net assets. What will the divisional ROI be for year assuming Veach retains the
asset?
b What would divisional ROI be for year 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 decimal place ie
c Veach computes residual income using beginningoftheyear net assets. What will the divisional residual income be for year
assuming Veach retains the asset?
d What would divisional residual income be for year assuming Veach disposes of the asset for its book value and there is no gain or
loss on the sale?
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