Adjusted Present value:
Here fixed overheads was not part of the calculation, and in the question
it was not mentioned that wthether the overheads are allocated or specific overheads,in the question 5%growing rate also provided which may be indicator of specific overheads bt in the examiner anwer the overheads was not inluded! why?
The question says that the overheads are activity based, which implies that the are allocated rather than specific. (The 5% does not itself imply that they are specific – existing overheads can be growing at 5%)
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