Response to the following problem:
Ale Properties is a small family-owned company that only has equity share capital; it has no debt capital. Its net assets at 1 January 20X7 were € 1,000 and on the 31 December 20X7 the net assets were € 1400.There have been no issues or withdrawals of share capital during the year. The general rate of inflation, as measured by the Retail Prices Index, is 10 per cent, whereas the specific rate of inflation for the type of goods sold by the company is 15 per cent. Calculate three alternative measurements of profit for the company using:
(a) the money maintenance concept;
(b) the real capital maintenance concept;
(c) the maintenance of specific purchasing power.