Relevant Cash Flows for DCF Inflation (example 4)

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  1. Avatar of rolake rolake says:
    April 24, 2013 at 12:14 am

    Based on my residual knowledge, I thought when the depreciation rate is 20% it means the asset life is 5years or 25% it means it is 4years. But to my greatest surprise when the depreciation rate was 25% (four years based on default knowledge) and the investment under appraisal has a useful life of 3years, the depreciation working stopped at 3years instead of 4years. Is it that the question is NOT possible to come like that in exam , in other words, just used like that or we are to consider JUST the investment under the appraisal’s useful life of 3years ONLY in this case i.e. the example given and ignore the default rule. Indeed, you are great! Thanks a lot.

    • Avatar of elsie2009 elsie2009 says:
      April 25, 2013 at 9:44 pm

      @rolake You are confusing depreciation with capital allowances. Depreciation is the accounting charge to the profit and loss over the economical useful life of an asset. Capital allowances are a reduction in tax payable on qualifying assets which reduces the amount of corporation tax owing.

      In addition depreciation is a notional accounting cost and not a CASH flow it is therefore not a relevant cost and should be ignored.

  2. Avatar of saidu2 saidu2 says:
    April 21, 2013 at 9:23 am

    Please opentuition I need an urgent t video lecture on F5 June,2009 Exam Q4 Bit & pieces & Dec 2009 Exam Q5 Stay Clear, Very important.
    Thanks for your good jods…!!

  3. Avatar of beenish2013 beenish2013 says:
    April 21, 2013 at 8:34 am

    well delievered lecture. . thanks. .

  4. Avatar of marcie157 marcie157 says:
    April 6, 2013 at 7:39 pm

    Brilliant explanation, so easy and straightforward. I wish my classes were the same!!! thank you so much

  5. Avatar of olga788 olga788 says:
    December 1, 2012 at 10:40 am

    oh, what has happened? the lecture was running and suddenly stopped. now all F9 lectures show 0:00 minutes length and do not play =(

  6. Avatar of jeweltrinidad jeweltrinidad says:
    October 30, 2012 at 12:21 am

    This was so simple and easy to understand.Thanks

  7. Avatar of will1304 will1304 says:
    October 14, 2012 at 3:38 pm

    In my BPP book, we have the ‘fisher formula’, (1+i)=(1+r)(1+h),
    why no mention of this in opentuition notes or lectures? Please help….is it the formula that is on page 52 of the notes?

  8. Avatar of stathis7 stathis7 says:
    September 8, 2012 at 12:19 pm

    Excellent ! ! So simple ! keep it up

  9. Avatar of annak annak says:
    April 26, 2012 at 11:06 pm

    Great explanations! I started watching all of lectures and the subject suddenly feels so straightforward. Why books can not be written in that way?! The taxation on investment seems now such a simple little calculation.
    If I pass F9 it will be only thanks to those lectures.
    Hugely appreciated :-)

  10. Avatar of lloyd lloyd says:
    April 13, 2012 at 8:17 pm

    How do we show the workings on an answer shit. Do we need to show them the way u were doing?

  11. Avatar of maggs maggs says:
    April 8, 2012 at 12:02 pm

    well explained, keep up the good work, i am ready to attempt questions on this and am pretty sure i will tackle them with no difficulties at all. You are simply the best!!!

  12. Avatar of ulysses ulysses says:
    March 3, 2012 at 12:09 pm

    Good subject delivery and perfect explaination of subject matter. I like it.

  13. Avatar of chinnu82 chinnu82 says:
    October 14, 2011 at 10:16 am

    Really enjoy your lectures and its soo understandable. Thank you so much.

  14. Avatar of vazquezwinter says:
    October 2, 2011 at 6:26 am

    What the 25% represent?I do not figure out how to calculate the workings of capital flows?Thank you!

  15. Avatar of ashung ashung says:
    July 15, 2011 at 4:38 pm

    if all lectures go like this, then, there would be no problems at all.
    well organised and easily to understand.

  16. Avatar of nyambira nyambira says:
    May 24, 2011 at 4:44 pm

    You explain more clearer thank you for that

  17. Avatar of panayiotis2002 panayiotis2002 says:
    May 12, 2011 at 5:10 pm

    Nice Lecture. Very understandable

  18. Avatar of doandry doandry says:
    May 5, 2011 at 12:03 pm

    thanks for all your help, your lectures made my home studying more enjoyable because you are very clear in your explanations.

  19. Avatar of magdadodo magdadodo says:
    April 13, 2011 at 9:04 pm

    Brilliant…fantastic lecturer..

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