Intermediate. Division L has reported a net profit after tax of 8.6m for the year ended 30
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Intermediate. Division L has reported a net profit after tax of £8.6m for the year ended 30 April 2015. Included in the costs used to calculate this profit are the following items:
e interest payable of £2.3m;
e development costs of £6.3m for a new product that was launched in May 2014, and is expected to have a life of three years;
e advertising expenses of £1.6m that relate to the relaunch of a product in June 2015.
The net assets invested in Division L are £30m.
The cost of capital for Division L is 13 per cent per year.
Calculate the economic valued added® for Division L for the year ended 30 April 2015. (3 marks)
CIMA P1 Management Accounting: Performance Evaluation
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