Early in January 2022, Tyler Incorporated acquired a new machine and incurred $8,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned net operating income of $88,000 on average total assets of $722,000 for 2022. Assume that the total cost of the new machine will be depreciated over 8 years using the straight-line method. Required: a. Calculate the ROI for Tyler for 2022. b. Calculate the ROI for Tyler for 2022, assuming that the $8,000 had been capitalized and depreciated over 8 years using the straight-line method. (Hint: There is an effect on net operating income and average assets.) c. Given your answers to parts a and b, why would the company want to account for this expenditure as an expense? d. Assuming that the $8,000 is capitalized, what will be the effect on ROI for 2023 and subsequent years, compared to expensing the interest, installation, and overhead costs in 2022?

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