Exercise 14 - 45 (Algo) Compare Historical Cost, Net Book Value to Gross Book Value (LO 14 -2, 5) The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $42.0 million and having a four-year expected life, after which the assets can be salvaged for $8.4 million. In addition, the division has $42.0 million in assets that are not depreciable. After four years, the division will have $42.0 million available from these non depreciable assets. This means that the division has invested $84 million in assets with a salvage value of $50.4 million. Annual operating cash flows are $13.2 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 ROI, using net book value and gross book value for each year.

Exercise 14 - 45 (Algo) Compare Historical Cost, Net Book Value to Gross Book Value (LO 14 -2, 5) The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $42.0 million and having a four-year expected life, after which the assets can be salvaged for $8.4 million. In addition, the division has $42.0 million in assets that are not depreciable. After four years, the division will have $42.0 million available from these non depreciable assets. This means that the division has invested $84 million in assets with a salvage value of $50.4 million. Annual operating cash flows are $13.2 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 ROI, using net book value and gross book value for each year.