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part of the question is
2011
profit after tax: 2000 – continuing ops
profit after tax: (750) – discontinued ops2010
profit after tax: 1750 – continuing ops
profit after tax: 600 – discontinued opsAnalysts expect profits to increase by 6% from existing ops for year 2012
what is the profit if analysts are correct?
in the answer, 2000 is taken and the loss of 750 is ignored, ie profit = 2000×1.06=2120
is this because the discontinued ops have to be disposed off within 12 months and that these ops are not expected to exist in 2012?
thanks
The expression is “discontinued operations” not “discontinuing”
They’ve stopped, there’s no more coming from that source.
So they have no affect going forward
given the same data, what if analysts made prediction in 2010 about 2011.
would the discontinued amount be ignored?
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