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BPP EXAM KIT JUNE 2021 EDITION SUM NO 334 BISCUIT AND CAKES(6/12) – 111 PAGE NO

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › BPP EXAM KIT JUNE 2021 EDITION SUM NO 334 BISCUIT AND CAKES(6/12) – 111 PAGE NO

  • This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.
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  • October 10, 2021 at 7:45 pm #637416
    shaunak22
    Participant
    • Topics: 220
    • Replies: 41
    • ☆☆☆

    DOUBTS – QUESTION D CALCULATE THE NEW ROI AND RI

    the new investment in machiney cost 2.12mil and has some deprreciation related to it I checked out the solution and in the solution the full investment amount of 2.12mil is included in net assers while calculating new ROI without subtracting any depreciation from the net assets figure but the depreciation is sutracted from profit

    shouldn’t depreciation be subtracted from the new net assest amount figure as well?

    October 11, 2021 at 9:07 am #637435
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54702
    • ☆☆☆☆☆

    Unless the question states otherwise, the examiner prefers the ROI to be calculated using the opening value of the net assets soon the basis that it is the net assets at the beginning of the period that generate the profit for the period.

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