DIVISIONAL PERFORMANCE MEASUREMENT

Division B has now been offered an immediate opportunity to invest in new machinery at a cost of $2·12 million.
The machinery is expected to have a useful economic life of four years, after which it could be sold for $200,000.
Division B’s policy is to depreciate all of its machinery on a straight-line basis over the life of the asset. The
machinery would be expected to expand Division B’s production capacity, resulting in an 8·5% increase in
contribution per month.

Recalculate Division B’s expected annualised ROI and annualised RI, based on July’s budgeted operating

ANSWER
Depreciation = 2,120,000 – 200,000/48 months = $40,000 per month.

Good day sir,I am having issues with understanding how the depreciation figure was calculated.why was the denominator for calculating the straight line depreciation taken in months instead of years