Dear sir,
In the question it says "...It has a carrying value of $6000 and could be sold for this amount. They would use the proceeds from the sale plus additional cash from HO to purchase a new machine for $15,000".
From here I understand that the extra amount (received from HO) to be added to investment is 15000-6000=9000.
But the answer uses 15000.
Could you help explain this please? Thank you so much in advance.
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BPP Revision Kit Sep 2020 – No. 178 - ROI
5y ago#1Question 178 is about the sales quantity variance, not the ROI.
However from what you have typed, the cost of the new machine is 15,000. 6,000 comes from the sale of the existing machine and 9,000 is the extra cash needed.
Hi sir, sorry it was a typing mistake. It was question no. 285
5y ago#3The answer has added 9,000. They have subtracted 6,000 and added 15,000, which is the same as adding 9,000 :-)
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