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Melplash bpp investment appraisal

This topic has 1 reply, 2 voices, and was last updated 1 year ago by LMR1006.

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May 2, 2024 at 7:20 am #704807
sabitha
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Sir in this question while calculating roce we have deducted 30m scrap value from the forth year pv of the cash flow what is the reason behind it
Can you explain sir
May 2, 2024 at 4:43 pm #704842
LMR1006
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You must calculate an average of the capital employed
So the investment is 220 and the rv (scrap) is 30
They are both forms of capital to the project – both as an asset
That is 250/2
Beccause there are two cashflows
That makes 125
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