The Street Division of Labrosse Logistics Just started operations. It purchased depreciable assets costing $41.5 million and having a four-year expected life, after which the assets can be salvaged for $8.3 million. In addition, the division has $41.5 million in assets that are not depreciable. After four years, the division will have $41.5 million available from these non depreciable assets. This means that the division has Invested $83 million in assets with a salvage value of $49.8 million. Annual operating cash flows are $13.1 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. Note: Enter your answers as a percentage rounded to 2 decimal places (l.e., 32.10). ROI Net Book Value Year 1 15.66% Year 2 17.40% 19.58% Year 3 Year 4 22.38 Gross Book Value 15.66% 15.66% 15.66% % 15.66 %
The Street Division of Labrosse Logistics Just started operations. It purchased depreciable assets costing $41.5 million and having a four-year expected life, after which the assets can be salvaged for $8.3 million. In addition, the division has $41.5 million in assets that are not depreciable. After four years, the division will have $41.5 million available from these non depreciable assets. This means that the division has Invested $83 million in assets with a salvage value of $49.8 million. Annual operating cash flows are $13.1 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. Note: Enter your answers as a percentage rounded to 2 decimal places (l.e., 32.10). ROI Net Book Value Year 1 15.66% Year 2 17.40% 19.58% Year 3 Year 4 22.38 Gross Book Value 15.66% 15.66% 15.66% % 15.66 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
bot imag plase.
Transcribed Image Text:The Street Division of Labrosse Logistics Just started operations. It purchased depreciable assets costing $41.5 million and having a
four-year expected life, after which the assets can be salvaged for $8.3 million. In addition, the division has $41.5 million in assets that
are not depreciable. After four years, the division will have $41.5 million available from these non depreciable assets. This means that
the division has Invested $83 million in assets with a salvage value of $49.8 million. Annual operating cash flows are $13.1 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.
Note: Enter your answers as a percentage rounded to 2 decimal places (l.e., 32.10).
ROI
Net Book Value
Year 1
15.66%
Year 2
17.40%
19.58%
Year 3
Year 4
22.38
Gross Book Value
15.66%
15.66%
15.66%
%
15.66
%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education