Division y has annual operating profit of pound40 million, Ask an Expert

Management Studies

Division Y has annual operating profit of £40 million after charging £6 million for the development cost of a new product which has been launched and is expected to last this year and for another two further years. The balance sheet shows non-current assets of £140 million, management estimate that the replacement cost of these non-current assets would be £170 million, the division also has working capital of £16 million. The division's depreciation policy is that it applies 20% on a reducing balance basis. The group head office uses an 11% cost of capital.

What is the EVA for this division?

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Strategic Management, Management Studies

Category:- Strategic Management
Reference No.:- M9576490

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