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Good morning sir…
1. in part (c), the answer uses a factor of 2/3 to value the selling of fridges division. but the we are told that fridges re twice the size of parts.
so, shd it not be 1/2?
2. this entire question is based on whose perspective? is it the current shareholders of doric?
thank u
1. If fridges are twice the size of parts, them for every 100 parts the fridges must be 200 – which gives a total of 300.
So fridges are 100/300 (i.e. 1/3) of the total, and parts are 200/300 (i.e. 2/3) of the total!2. I don’t understand your question. There is no mention of there being new shareholders – there are only the current shareholders!!!
The question is as to whether to move production to Gamala or not!!
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