ROI Calculation

An investment centre has prepared the following forecasts for the next financial year. Operating profit before depreciation------------------------------- 85,000 Depreciation --------------------------------------------------------------20,000 Net current assets at 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. The correct answer is: 30.9% Profit employed Capital $ $ Original forecast --------------------------- 65,000 210,000 Effect of machine sale ------------- (2,500) (6,000) Effect of machine purchase -------------- 5,200 15,000 ------- ---------- 67,700 219,000 Revised ROI = 67,700/219,000 = 30.9% ----------------------------------------- My question In their solution, they did not remove the $500 depreciation for the asset that was disposed, and they didn't consider the $2000 depreciation for the newly acquired asset. Please help me out.