ROCE

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November 25, 2020 at 1:25 am #596341
Noah098
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Sir when calculating ROCE for any project, we need initial capital investment. But does that initial capital investment figure includes capitalised expenditure on R&D? I think it should not as R&D expenses are sunk costs but my study text seems to suggest otherwise… could you shed some light on this sir?
November 25, 2020 at 8:38 am #596370
John Moffat
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Because ROCE is an accounts based measure, we include all expenditure that will be capitalised on the SOFP.
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