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ROI, BPP Revision pg 101 Q 297

This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

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October 9, 2021 at 12:01 pm #637341
anniebabe
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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
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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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