[asjy]

Sir, I also have another question, the next question is asking for the new RI for Dugaldo, but why is it using incremental profit not directly adding the old and new to find the new RI to be compared with the old RI?

Here is the answer:
Profit from proposal = (60,000 – 15,000) = 45,000
Existing profit = (60,000 – 25,000) = 35,000
Incremental profit 10,000
Imputed interest = 12% × 75,000 (9,000)
Incremental RI (Positive so accept) 1,000

[asjy]

Okay Sir, thank you for the explanation. It seems like I have forgotten some part of MA

[Author]

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