Refer to the information presented in Mini-Exercise 6.4. Assume that Gandolfi Construction Co. calculated depreciation expense for the CAT 336DL earth mover on the straight-line method and reported $950,000 of net income for the year ended December 31, 2022. The company’s average total assets for 2022 were $10,000,000.

Data from in Mini-Exercise 6.4

Gandolfi Construction Co. purchased a CAT 336DL earth mover at a cost of $1,200,000 in January 2022. The company’s estimated useful life of this heavy equipment is 10 years, and the estimated salvage value is $300,000.

Required:
a. Calculate Gandolfi’s ROI for the year ended December 31, 2022.
b. Calculate what Gandolfi’s ROI would have been for the year ended December 31, 2022, had the company used the double declining-balance depreciation method for the CAT 336DL earth mover. Ignore the effects of income taxes.