Return to questionThe Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $48.0 million andhaving a four-year expected life, after which the assets can be salvaged for $9.6 million. In addition, the division has $48.0 million inassets that are not depreciable. After four years, the division will have $48.0 million available from these nondepreciable assets. Thismeans that the division has invested $96.0 million in assets with a salvage value of $57.6 million. Annual depreciation is $9.6 million.Annual operating cash flows are $20.6 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. (Enter your answers as a percentage rounded to 1decimal place (i.e., 32.1).)Answer is complete but not entirely correct.ROIYear 1Year 2Year 3Net Book ValueGross Book Value12.8%10.9%14.3 %10.9%16.3 %10.9%Year 419.1%10.9%

The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing having a four-year expected life, after which the assets can be salvaged for $9.6 million. In addition, the division has assets that are not depreciable. After four years, the division will have $48.0 million available from these nondeprecia means that the division has invested $96.0 million in assets with a salvage value of $57.6 million. Annual depreciation Annual operating cash flows are $20.6 million. In computing ROI, this division uses end-of-year asset values in the de 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. (Enter your answers as a percentage decimal place (i.e., 32.1).) Answer is complete but not entirely correct. Year 1 Year 2 ROI Net Book Value 12.8% 14.3 % Gross Book Value 10.9% 10.9%

The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing having a four-year expected life, after which the assets can be salvaged for $9.6 million. In addition, the division has assets that are not depreciable. After four years, the division will have $48.0 million available from these nondeprecia means that the division has invested $96.0 million in assets with a salvage value of $57.6 million. Annual depreciation Annual operating cash flows are $20.6 million. In computing ROI, this division uses end-of-year asset values in the de 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. (Enter your answers as a percentage decimal place (i.e., 32.1).) Answer is complete but not entirely correct. Year 1 Year 2 ROI Net Book Value 12.8% 14.3 % Gross Book Value 10.9% 10.9%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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