The Ste. Marie Division of Pacific Media Corporation juststarted operations. It purchased depreciable assets costing $43.0million and having a four-year expected life, after which theassets can be salvaged for $8.6 million. In addition, the divisionhas $43.0 million in assets that are not depreciable. After fouryears, the division will have $43.0 million available from thesenondepreciable assets. This means that the division has invested$86.0 million in assets with a salvage value of $51.6 million.Annual depreciation is $8.6 million. Annual operating cash flowsare $21.7 million. In computing ROI, this division uses end-of-yearasset values in the denominator. Depreciation is computed on astraight-line basis, recognizing the salvage values noted. Ignoretaxes. Required: a. & b. Compute ROI, using net book value andgross book value for each year. (Enter your answers as a percentagerounded to 1 decimal place (i.e., 32.1).)
