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In part D Residual Income for division B is 1,332,000 after adjustment for the investment. In explanation it says if the investment is undertaken, RI is actually higher than without investment. However, before investment RI for division B was 1,412,000. I did not get it, am I comparing wrong figures?
Hi nataly
In the examiner answer related to part d it is written that RI is actually lower than without the investment so manger of B is unlikely to accept the project however u are comparing right figures 1332 is actually lower than 1412 i would prefer u read the answer from acca website
hope it is clear nowThanks for your respond. I have printed past papers long time ago and they had that confusing mistake, by now they have corrected it. By the way in BPP revision kit they have the same mistake stating RI is higher with the investment and that company should proceed with the investment.
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