Upper Division of Lower Company acquired an asset with a cost of $560,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows.   Year Cash Flow 1 $ 205,000   2   270,000   3   290,000   4   315,000       The cost of the asset is expected to increase at a rate of 10 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.   Required: a. What is the ROI for each year of the asset's life, using a historical cost approach? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).) b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year? (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

LO, Inc., is considering an investment of $440,000 in an asset with an economic life of five years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $279,500 and $88,000, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 2 percent. The company will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is estimated to be $60,000 in nominal terms at that time. The one-time net working capital investment of $17,500 is required immediately and will be recovered at the end of the project. The corporate tax rate is 25 percent. What is the project's total nominal cash flow from assets for each year? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Cash flow

2. If an asset costs $70,950 and is expected to have a salvage value of $949 at the end of five year life, and generates annual cash net cash inflows of $4,447 each year, the cash payback period rounding to two decimal places is

In Year 1, Darw Inc. purchased equipment with an expected useful life of 5 years. The initial cost of the equipment was $85,000. Darw Inc.cost of capital is 12%. At the time it purchased the equipment, Darw Inc. projected the following cash inflows from use of the equipment:    Year Projected Cash Inflow 1 $20,000 2 $30,000 3 $35,000 4 $25,000 5 $15,000 At the end of Year 5, the equipment had reached the end of its useful life. Darw Inc.determined that it had actually generated the following cash flows:   Year Actual Cash Inflow $10,000 $20,000 $30,000 $30,000 $30,000 1) What was the net present value that Darw Inc. calculated for the equipment when the company purchased the asset?