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Hey
I had a small doubt
I am actually kind of confused in the ROI.
When there is depreciation given in the ques and profit before depreciation, we will deduct the depreciation from it but do we also deduct the depreciation from our capital employed (fixed assets)?It depends whether you are asked to use the opening net assets or the closing net assets.
If the question does not make it clear then you use the opening net assets, so no depreciation for the current year, on the basis that it was the net assets at the start of the year that earned the profits for the year.
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