roce

If you have $100 in your pocket today, and you spend during the day so you are left with $10 at the end of the day, then the average amount (the amount you had in the middle of the day is (100 + 10) / 2 = 55. I hope this makes sense, but if not then watch the Paper F2 lectures on investment appraisal because I do spend time there explaining the logic.

In that case you really need to watch the Paper F2 lectures that I referred to in my previous reply.