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Hi
Can anyone please explain step by step how to solve this question?
I know the answer, however, I dont understand how to get to that answer.
Thank you in advance
The BPP answer does show the full workings and so you will have to say which bit of the answer you are not clear about – there is obviously no point in me simply writing out the BPP answer 🙂
As always, the ROI is the new profit (the existing profit plus the extra expected from the new machine) as a % of the average capital employed (you know the opening capital employed, we can calculate what the closing capital employed will be, and then we add them together and divide by 2 to get the average).
Thank you so much for your quick reply.
Even though it wasnt step by step answer, your advise helped me to solve the question. Watched ROI and RI lecture a couple of times now so really hoping to solve questions with more ease.
Appreciate all your lectures, you are brilliant.
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