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The North Division of Acer plc earns a constant400,000 per year in divisional profits and has total assets invested of3,000,000. These assets are depreciated evenly
The North Division of Acer plc earns a constant400,000 per year in divisional profits and has total assets invested of3,000,000. These assets are depreciated evenly over their life. Divisional investment is calculated by reference to the total assets held less any depreciation to date. Over the next fiveyears, none of thenon-current assets will need to be replaced and no newnon-current assets will be acquired. Current assets will remain at their existing level.
What will happen to the ROI of North Division over the next fiveyears?
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