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how ROCE is 13.34% in June 2016 Q1 part IV

Aaniza10y ago
Dear Sir Would you please tell me how expected ROCE is 13.34% in June 2016 Q1 part IV Demand scenario Low Medium High Revenue ($m) 12.5 13 13.5 Probability (%) 20 50 30 Forecast operating Margin 4.1 4.3 4.4 The capital employed is $ 4.2 I appreciate your answer Sir Regards
kengarrettkengarrettTutor10y ago#1
Per the answer: Demand scenarios Low Medium High Revenue ($m) 12·5 13 13·5 Probability (%) 20 50 30 Forecast operating margin (%) 4·1 4·3 4·4 Forecast operating profit ($m) 0·5125 0·559 0·594 [=revenue x margin %] Expected profit = 20% x 0.5125 + 50% x 0.559 + 30% x 0.594 = 0.5602 New store cost 4.2 (note 2 of question) ROCE = 100 x 0.5602/4.2 = 13.33 [I think 13.33 is correct and 13.34 is slightly wrong]
Aaniza10y ago#2
Thanks very much Ken I appreciate your help as always. regards
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