Question: if u have any question ask me it is complete question Brubaker Inc. operates midscale hotels in three regions of the United States: Delaware, Pennsylvania,

if u have any question ask me it is complete question

if u have any question ask me it is complete question Brubaker

Brubaker Inc. operates midscale hotels in three regions of the United States: Delaware, Pennsylvania, and Georgia. Each geographic market is considered a separate division. The Delaware division is made up of six hotels, each built in early 2008. The Pennsylvania division is made up of four hotels, each built in early 2012. The Georgia division is the newest, consisting of four hotels built in 2016. Division managers at Brubaker are evaluated on the basis of ROI. The following information refers to the three divisions at the end of 2020 (Brubaker scal year end is September 31\"): Division revenues $346,720, 000 $241,000,000 $217,800,000 Delaware Pennsylvania Geoggj a Total $805,520,000 Division expenses $317,800,000 $220,840,000 $199,160,000 $737,800,000 Division operating income $28,920,000 $20,160,000 $18,640,000 $67,720,000 Gross book value of long- term assets $180,000,000 $150,000,000 $162,000,000 $492,000,000 Accumulated depreciation $132,000,000 $70,000,000 $43,200,000 $245,200,000 Current assets $39,992,000 $30,728,000 $32,984,000 $103,704,000 Depreciation expense $12,000,000 $10,000,000 $10,800,000 $32,800,000 Construction cost index for year of construction 100 110 l 18 1. Calculate ROI for each division using net book value of total assets as the measure of investment. 2. Using the construction cost index to correct for differences in the year of construction of the hotels, compute R0] using current-cost estimates for long-term assets and depreciation expense. Construction cost index for 2020 is 122. Estimated useful life of operational assets is 15 years. 3. How does the choice of long-term asset valuation affect management decisions regarding new capital investments? Why might this be more signicant to the Delaware division manager than to the Georgia division manager

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!