This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking. Pro is a division of Mo and is an investment centre. The head office controls finance, HR and IT expenditure but all other decisions are devolved to the local centres. The statement of financial position for Pro shows net value of all assets and liabilities to be $4,500m. It carries no debt itself although the group has debt liabilities. The management accounts for income read as follows: $m Revenue 3,500 Cost of sales 1,800 Local administration 250 IT costs 50 Distribution 80 Central administration 30 Interest charges 90 Net profit 1,200 Ignore taxation. If the cost of capital is 12%, what is the division’s residual income?
【参考答案及解析】
Controllable profit is 1,200 + 90 + 30 + 50 = $1,370m Assets at start of year are $4,500m Notional interest charges at 12% (4,500 × 0.12) $540m Residual Income $830m
Controllable profit is 1,200 + 90 + 30 + 50 = $1,370m Assets at start of year are $4,500m Notional interest charges at 12% (4,500 × 0.12) $540m Residual Income $830m