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ROI, BPP Revision pg 101 Q 297

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › ROI, BPP Revision pg 101 Q 297

  • This topic has 1 reply, 2 voices, and was last updated 8 months ago by John Moffat.
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  • October 9, 2021 at 12:01 pm #637341
    anniebabe
    • Topics: 32
    • Replies: 97
    • ☆☆

    Hi
    Please can someone let me know why I am taking depreciation from the divisional profit $850000
    I had managed to get the mid year capital employed $2800000
    Many thanks

    October 9, 2021 at 2:27 pm #637350
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49601
    • ☆☆☆☆☆

    We always use the accounting profit (which is after depreciation) when calculating the ROI.

    The question says that the profits stated are before depreciation and so we need to subtract the depreciation.

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