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Hi,
I was just wondering if someone can help me with the adjusted capital employed in EVA. Every question i do seems to be different. If he states in the question that something has not been capitalised surely it needs to be added to the capital employed figure?
For example in Dec 2012 Q3 he states that R & D had not been capitalised in the sofp but then there is no adj in the eva???
Is this because of the dates? with it saying 2012 is the first year of the project and you use opening balances to adj???
So in this case if we were doing 2013 EVA and 12 was the first year i would need to add this back???How detailed do you think he will ask EVA and for how many marks…… in 2012 it was for 13 marks which is rather generous.
Thanks
EVA always uses the opening capital employed. Therefore, if R&D had been first written off in the year in question, there would be nothing to add back to the opening capital.
RnD is considered a value adding activity along with advertising and staff training etc, As in the future these will all provide better revenue/profit/cost reduction etc
So RnD will be added back to NOPAT
Also do not worry if you get 1 item from EVA incorrect it will only be worth 0.5-1 mark
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