* Explain in full detail Question 2Tesia Trading Ltd has two (2) divisions,. Photovoltaic Equipment and High-Tech Batteries.The following information is provided for both divisions:High-TechBatteriesPhotovoltaicEquipment30,000,000Sales (H)45.000.000Costs ()34,500,00020.250,000Current assets (A)7.500.0006,000,00022,500,0009.000,000Non-current Assets ()Controllable costs are typically 75% of divisional costs, the balance of 25% beingallocated overheads from the head office. The overall company cost of capital is 15%.Divisions are treated as investment centres.Required:a) Compute the following for the divisions and comment on your result;i. Absolute profiti. Return on investment

Part a: i. Absolute profit = Sales - Costs High-Tech Batteries Absolute profit = 45,000,000 -…

estion Tesla Trading Ltd has two (2) divisions, Photovoltaic Equipment and High-Tech Batteries, The following information is provided for both divisions: High-Tech Batteries Photovoltaic Equipment Sales (H) 45.000,000 30,000,000 Costs () 34,500,000 20.250,000 Current assets () Non-current Assets () Controllable costs are typically 75% of divisional costs, the balance of 25% being allocated overheads from the head office. The overall company cost of capital is 15%. 7.500,000 6.000,000 22,500,000 9.000,000 Divisions are treated as investment centres. Required: a) Compute the following for the divisions and comment on your result; i. Absolute profit ii. Return on investment

estion Tesla Trading Ltd has two (2) divisions, Photovoltaic Equipment and High-Tech Batteries, The following information is provided for both divisions: High-Tech Batteries Photovoltaic Equipment Sales (H) 45.000,000 30,000,000 Costs () 34,500,000 20.250,000 Current assets () Non-current Assets () Controllable costs are typically 75% of divisional costs, the balance of 25% being allocated overheads from the head office. The overall company cost of capital is 15%. 7.500,000 6.000,000 22,500,000 9.000,000 Divisions are treated as investment centres. Required: a) Compute the following for the divisions and comment on your result; i. Absolute profit ii. Return on investment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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