Gandolfi Construction Co. purchased a used CAT 336DL earth mover at a cost of $500,000 in January 2016.
The company's estimated useful life of thi9 heavy equipment is 10 years, and the estimated 9alvage value is $100,000.
Assume that Gandolfi Construction Co. calculated depreciation expense for the CAT 336DL earth mover on the straight-line method and reported $600,000 of net income for the year ended December 31. 2016.
The company's average total assets for 2016 were $4,000,000. Required Calculate Gandolfi's ROI for the year ended December 31, 2016.
Calculate what Gandolfi's ROI would have been for the year ended December 31, 2016, had the company used the double-declining- balance depreciation method for the CAT 336DL earth mover.