Last year Joe Cash won £5 million in the national lottery, which he used to start up a business called Joe Cash Ltd. At the start of the year the business had £5 million capital and £5 million cash. During the year the business purchased inventory. By the end of the year all the inventory had been sold for £6.25 million. Assume there were no other transactions.

(a) Calculate the profit for the year under the financial capital maintenance concept.

(b) Joe finds out that it would cost £5.65 million to replace the inventory at the end of the year in terms of its operating capacity. Calculate the profit for the year under the physical capital maintenance concept.