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Dear Tutor,
I face problem in calculation for question 1 (iv )
Impact of new factory on performance dashboardHow do i calculate on those profits and ROCE, need help please.
May i have the workings?
Thank you.I think it is really badly explained in the answer.
You are told to use 2015 as a base and also to estimate profit before interest and tax at $103m
This means that the new factory solution reduces profits by $5m from $108m [ie 2m x ( 75 – 21)] to $103m. Really these figures should have been called contribution, I think.
If contribution reduces by $5m, profits will decrease from 71 to 66.
I think the capital employed figures are relatively easy.
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