The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $$37\mathrm{.}7$ million and having a four$-$year expected life, after which the assets can be salvaged for $$7\mathrm{.}54$ million. In addition, the division has $$37\mathrm{.}7$ million in assets that are not depreciable. After four years, the division will have $$37\mathrm{.}7$ million available from these nondepreciable assets. This means that the division has invested $$75\mathrm{.}4$ million in assets with a salvage value of $$45\mathrm{.}24$ million. Annual operating cash flows are $$13\mathrm{.}7$ 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.

In computing ROI, this division uses end$-$of$-$year asset values. Assume that all cash flows increase $10$ percent at the end of each year. This has the following effect on the assets' replacement cost and annual cash flows:

$\backslash$table$[[\backslash$table$[[$End of$],[$Year$]],$Replacement Cost,Annual Cash Flow$],[1,$$$75,400,0001\mathrm{.}1=$$$82,940,000,$$$13,700,0001\mathrm{.}1=$$$15,070,000$