Early in january 2010 compass inc. acquired a new machine, Ask an Expert

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Early in January 2010, Compass, Inc. acquired a new machine and incurred $9,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned net operating income of $89,000 on average total assets of $704,000 for 2010. Assume that the total cost of the new machine will be depreciated over 10 years using the straight-line method.

find out the ROI, for 2010, assuming that the $9,000 had been capitalized and depreciated over 10 years using the straight-line method. (Hint: There is an effect on net operating income and average assets.)

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Category:- Basic Finance
Reference No.:- M928325

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