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“Operating profit was calculated after charging development and launch costs for new product = £30 million. The company has assumed that the new product will generate profits for three years.”
“Company has non-capitalised leases of £20 million during the period.”For EVA purposes, should the £30m and £20m be added back to the CE for the year, or the CE for next year?
For EVA the CE is the opening CE, so anything happening during the year will not affect that, but would affect the opening CE for the folllowing year.
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