The current assessed value of the bldg is $200,000.
The assessed value of the land is $20,000,000, and it reflects the net value of the property if the current bldg us demo'd and replaced with an office and shopping complex.
The current value of the franchise-assuming the league owners approve a sale is $50,000,000.
a) Ignoring taxes, if the team earns $3,000,000/year, what is the Return on Investment using net book value and historical cost as the measures of the investment?
b) Ignoring taxes, and assuming the org's cost of capital is 15%, if the team earns $3,000,000/year, what is the residual income using net book value and historical cost as the measures of the investment?
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