Ibis Company Residual Income Computations Using Net Book Value

Year
1 2 3 4 5
Net Book Value at Beginning of Year 100 80 60 40 20
(Rs. '000)
Profit Before Tax ( '000) 30 30 30 30 30
Less: Capital Charge 25% of 25 20 15 10 5
Investment Base (Rs. '000)

Residual Income (Rs. '000) 5 10 15 20 25

Sales Revenue XXX

Less: Exps XX

Profit XXX

Less: Int XX

PBT XXX

Less: Tax XX

PAT XXX

Less: PD XX

Residual Income XX