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    • Avatar of John Moffat says

      Yes – for simulation only writing. Risk adjusted discount rate could be only writing, but it is effectively Capital Asset Pricing Model (where there certainly will be calculations) but that is covered later in the Course Notes / lectures.

  1. Avatar of hamzaharoon says

    Seems That I am Learning F5 Again :D thanks Sir for a great Lecture but there is something I am a bit confused here, In your Notes The Wording for this Question are “and expects fixed overheads to increase by $140,000 per year”, May be Its silly but don’t you think that fixed overheads must increase or summed up by $140,000 Every year that is $140,000 in year 1, 280,000 in year 2 and so on……..? I just asked according to the wordings of your OT notes!

    N.B I am not a native English Speaker so please do correct me Mistakes

    Thanks

    • Avatar of John Moffat says

      The OpenTuition notes are worded in the same way as the wording in the exam – he has written this several times.

      If the overheads are currently (say) 100,000 per year, and they increase by 140,000 per year, then it means that they become 240,000 per year (not that they increase every year).

      (If your salary is 10,000 per year, and I tell you I am giving you a pay increase of 1,000 per year, surely you expect to get 11,000 per year – not automatically an increase of another 1,000 every year? :-) )

  2. Avatar of Atif Munir says

    It is mentioned in Example 2: “and expects fixed overheads to increase by $140,000 per year”

    But in video it is 140000 each year we are deducting from contribution. Why is that? Should not we deduct 140000 year1, 280000 year 2 and so on.??

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