Tutorial note from Kaplan revison kits:
It is the difference between :
-the forecase open market value, being £6.2m*(1.08*1.025)^5=£10306941
-the charge for repairs and renewals, being £1.2m*1.025^6=£1391632
green72 posted on the forum topic Which type of exchange rate is quoted when using interest rate parity fomula to estimate forward exc in the group P4 Advanced Financial Management: 2 years, 11 months ago
It should be indirect quote.
It is using Purchasing Power Parity to calculate the exchange rate.
The calculation is:
Y0 : 1/1.4925=0.6700
Has anyone practised Q1 in Dec 2007 exam?
In part b, the answers says “Given that 18 days of cost of sales is unfunded…”, but I can’t find any clue in the question for this informantion. Can you please tell me if your understand this? Thanks a lot.