Exercise 14-40 (Static) Compare ROI Using Net Book and Gross Book Values (LO 14-2,5) The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $45 million and having a four-year expected life, after which the assets can be salvaged for $9 million. In addition, the division has $45 million in assets that are not depreciable. After four years, the division will have $45 million available from these nondepreciable assets. This means that the division has invested $90 million in assets with a salvage value of $54 million. Annual depreciation is $9 million. Annual operating cash flows are $20 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: a. & b. Compute ROI, using net book value and gross book value. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).) X Answer is complete but not entirely correct. ROI Net Book Value Gross Book Value Year 1 13.6 X % 12.2 % Year 2 12.2 % 15.3 % 17.5 X % Year 3 12.2 % Year 4 20.4 X % 12.2 %