Performance Measurement and control

Dear Tr.Moffat,

Q. An investment center has prepared the following forecasts for the next financial year.

Operation profit before depreciation $85,000
Depreciation $20,000
Net current current assets at the beginning of year $30,000
Carrying value of non-current assets at beginning of year $180,000

The centre manager is now considering whether to sell a machine that is included in these forecasts. The machine would add $2,500 to divisional profit next year after depreciation of $500. It has a carrying value of $6,000 and could be sold for this amount. He would use the proceeds from the sale plus additional cash from Head office to purchase a new machine for $15,000. This new machine would add $5,200 to divisional profit next year after depreciation of $2,000.

What will be the expected return on investment (ROI) for the division next year, assuming that the manager acquires the new machine and that non-current assets are valued at the start-of-year carrying amount for the purpose of the ROI calculation.

->>> May I know the following question’s answer with details calculation. I am confuse about the words of The machine would add $2500 to divisional profit next year after depreciation of $500. It has a carrying value of $6,000 and could be sold for this amount.
Do we need to deduct new machine’s depreciation amount $2,000 from the non-current assets.

Thanks

May