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Hi, Looking for advice on past exam Q ….Q 3 Dec 2012….EVA question…can anyone explain why marking scheme uses closing (2012) capital employed figure( 779m) to calculate ROCE for part b of question…part on regulatory ROCE target.
For main EVA calculation we use closing figure from previous year, 2011 ( before we adjust it)………………
Thanks.
Maurice
779 has been used because it was stated in the question itself that Regulator calculates the ROCE for regulated activities on the basis of C.E measured by him for this purpose. (par 2 second last line)
In EVA we use opening C.E after making adjustments in it. This issue of C.E has been discussed by Grommit in EVA post, in this forum.You can read that for more clarification.
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