Compute ROI using net book value and gross book value

Assignment Help Accounting Basics
Reference no: EM132574207

Question - The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $36 million and having a four-year expected life, after which the assets can be salvaged for $7.2 million. In addition, the division has $36 million in assets that are not depreciable. After four years, the division will have $36 million available from these nondepreciable assets. This means that the division has invested $72 million in assets with a salvage value of $43.2 million. Annual depreciation is $7.2 million. Annual operating cash flows are $21 million. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that the division uses beginning-of-year asset values in the denominator for computing ROI.

Required - Compute ROI, using net book value and gross book value.

Reference no: EM132574207

Questions Cloud

Diagnosed with essential hypertension : What are the patient's problems? What pathophysiological changes are happening in his eyes and heart?
What are total taxable gifts subject to unified transfer tax : Although he is married, none of the gifts are considered joint gifts with his wife. What are the total taxable gifts subject to the unified transfer tax
Several examples of symbiotic relationships : In nature, there are several examples of symbiotic relationships. These relationships are vital to various ecosystems.
Public health care system : Define the terms public health and health promotion. What are the similarities and differences between the two?
Compute ROI using net book value and gross book value : The Ste. Marie Division of Pacific Media Corporation just started operations. Compute ROI, using net book value and gross book value
Describe the most common forms of cheating in the classroom : A group of nursing students are in the middle of an exam when two students witness another student pull out his phone and look up answers.
Find the structure of the compound : Use the spectral data below to find the structure of the compound
Journalize business transactions in general journal form : Journalize the following business transactions in general journal form. Then post to ledger, prepare trial balance and all financial statements
Analyze the previous journal entries : Analyze the previous journal entries and discuss the differences and similarities among the entries. Consider the type of writing entry

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture 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