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Problem 12-16 Accounting measures of performance Years 3-10 Use the cash flows and competitive spreads shown in the table below. (5 millions) Year @ Year 1 Year 2 Investment 12e Production (millions of pounds per year) e e 53 Spread ($ per pound) 1.08 1.08 1.es Niet revenues 57.24 Production costs 43.ee Transport e e Other costs 33 33 93 1.88 180.44 43.00 8 33 Cash flow - 120 - 18.76 24.44 NPV (at 1.7%) 0 Assume the dividend payout ratio each year is 100% - Calculate the year-by-year book and economic profitability for investment in polyzone production. Assume straight-line depreciation over 10 years and a cost of capital of 7%. (Negative answers should be indicated by a minus sign. Leave no cells blank - be certain to enter"0" wherever required. Do not round Intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.) Period Book income is in millions) Book rate of return (%) Economic Income (5 in millions) 0 1 2 3 4 5 8 10 1. What is the economic rate of rent (Do not found intermediate calculation Enter your answer a percent rounded to 2 decimal places) 6-1. What is the economic rate of return? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places..) Economic rate of return -2. Now compute the steady-state book rate of return (ROI for a mature company producing polyzone. Assume no growth and competitive spreads Negative answers should be indicated by a minus sign. Do not round Intermediate calculations. Enter your answers & percent rounded to 2 decimal places) Problem 12-16 Accounting measures of performance Years 3-10 Use the cash flows and competitive spreads shown in the table below. (5 millions) Year @ Year 1 Year 2 Investment 12e Production (millions of pounds per year) e e 53 Spread ($ per pound) 1.08 1.08 1.es Niet revenues 57.24 Production costs 43.ee Transport e e Other costs 33 33 93 1.88 180.44 43.00 8 33 Cash flow - 120 - 18.76 24.44 NPV (at 1.7%) 0 Assume the dividend payout ratio each year is 100% - Calculate the year-by-year book and economic profitability for investment in polyzone production. Assume straight-line depreciation over 10 years and a cost of capital of 7%. (Negative answers should be indicated by a minus sign. Leave no cells blank - be certain to enter"0" wherever required. Do not round Intermediate calculations. Enter your income answers in millions rounded to 2 decimal places and enter the rate of return as a percent rounded to 2 decimal places.) Period Book income is in millions) Book rate of return (%) Economic Income (5 in millions) 0 1 2 3 4 5 8 10 1. What is the economic rate of rent (Do not found intermediate calculation Enter your answer a percent rounded to 2 decimal places) 6-1. What is the economic rate of return? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places..) Economic rate of return -2. Now compute the steady-state book rate of return (ROI for a mature company producing polyzone. Assume no growth and competitive spreads Negative answers should be indicated by a minus sign. Do not round Intermediate calculations. Enter your answers & percent rounded to 2 decimal places)

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