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Dear Mr.John Moffat,
When Calculating the ROI and the question does specify which value of capital should we use the starting NBV or Mid-Year NBV or End year NBV, then which one should we use
best regards
Jasim AlmahalThere is no ‘rule’ – the opening capital would usually be the most sensible on the basis that it is this that will have earned the profits.
However in the exam it depends not just on whether the question specifies (as it normally will in Section C questions), but also on what information is available in the question (for Section A and B questions) – for example, if you are only given the closing capital then obviously this is all you could use 🙂
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