Compute roi using net book value and gross book value

Assignment Help Financial Accounting
Reference no: EM133117323

Question - The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $44.5 million and having a four-year expected life, after which the assets can be salvaged for $8.9 million. In addition, the division has $44.5 million in assets that are not depreciable. After four years, the division will have $44.5 million available from these non--depreciable assets. This means that the division has invested $89.0 million in assets with a salvage value of $53.4 million. Annual depreciation is $8.9 million. Annual operating cash flows are $22.0 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 - Compute ROI, using net book value and gross book value for each year.

Reference no: EM133117323

Questions Cloud

New orleans has made a commitment : It is September and an exporter (a business looking to purchase commodity to sell it later) in New Orleans has made a commitment to sell
Principles of public finance : In this homework, you are asked to apply the principles of public finance to the case of education. Applying the principles of public finance, why should or sho
Evaluating two mutually exclusive projects : (a) A project has 6 million cashflow each year for 5years, payback period of 4 years and rate of return 11%. Solve for the project's NPV, by showing all relevan
What is the value of your account on april : On January 1, you sold short one round lot (that is, 100 shares) of Disney stock at $21 per share. What is the value of your account on April
Compute roi using net book value and gross book value : In computing ROI, this division uses end-of-year asset values in the denominator. Compute ROI using net book value and gross book value
What is a mismatch risk : -Suppose you borrow RM10,000,000 in the interbank money market at a KLIBOR yield of 6% p.a for a term of 1 month.Should you buy or sell KLIBOR futures contract
What is dollar profit : You purchase 21 call option contracts with a strike price of $115 and a premium of $4.40. Assume the stock price at expiration is $122.46.
Account for the conversion of the convertible note : Assume in a VC financing round, company A's pre-money valuation is $15 million, the amount invested by the VC investors is $6 million. The principal plus accrue
What are the projected total operating assets : Sales are expected to grow by 14% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare syafiq statement of comprehensive income

Based on the information above, you are required to prepare Syafiq statement of comprehensive income and statement of financial position.

  How would the company record the transaction

How would the company record the transaction? A company purchased machinery by issuing 2,000 shares of $3 par value common stock.

  Direct labor-manufacturing overhead or period costs

Alex Industries manufacturers a famous brand of skateboard. The model is #1 in the market and Alex has a backlog of orders. The company's production capacity is 1,250 skateboards per month but the company has been maintaining 80% of full capacity, i...

  How much is bad debt expense for flyer company

How much is bad debt expense? Flyer prepares an aging of accounts receivable and the result shows that 4% of accounts receivable

  Beatrice qualifies for the earned income credit

For 2015, Beatrice qualifies for the earned income credit. She has a daughter who is 7 years old. Her earned income and adjusted gross income for 2015 are $6200. Calculate the amount of her 2015 earned income credit.

  Which appraisal method is recommended for businesses

Qaz Limited, Which appraisal method is recommended for businesses where the goal of management is to maximise the wealth of owners?

  Interpret the confidence interval

Explain how, if at all, the width of your confidence interval changes if the sample size was decreased to 40 orders, holding all else the same.

  Calculate the average-tax rate of this individuals

The net income of an individual is $50,000 the tax liability is $10, 704.50 and the marginal-tax rate is 28%. Calculate the average-tax rate of this individuals

  How would suggest the order of the product

Next month demands for these four products are stable and are 150, 675, 525, and 375, respectively. How would you suggest the order of the product.

  Audit standards require second set of analytical procedures

Audit standards require that auditors use analytical procedures at two stages in the audit: at the planning, or risk assessment, level and at the final, or concluding, stages of the audit. Why do audit standards require the second (final) set of anal..

  How do calculate the net absolute return

The company Derabel, S.A., Determine the Net Cash Flows after taxes of the project described above. Calculate the net absolute return.

  What is the weighted average after tax cost of capital

what is the Weighted Average after tax Cost of long term debt - what is the Weighted Average after tax Cost of Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd