The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets...
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The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $44.0 million and having a four-year expected life, after which the assets can be salvaged for $8.8 million. In addition, the division has $44.0 million in assets that are not depreciable. After four years, the division will have $44.0 million available from these nondepreciable assets. This means that the division has invested $88.0 millon in assets with a salvage value of $52.8 million. Annual depreciation is $8.8 million. Annual operating cash flows are $21.9 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 RO, using net book value and gross book value for each year. (Enter your answers as a percentage rounded to 1 decimal place (i.e., ROI Net Book Value Gross Book Value Year 2 Year 3 Year 4
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