FUBUKI Co. Dec 2010 – Issue cost & residual value

Sir,

In the question it was written that issue cost are 4% of gross finance required.

so what i understand that it will be amount of finance raised Rs.14,448 x 4% = 578.

but the published answer was : 14,448 x 4/96 = 604

I don’t understand this kindly explain.

further for e.g. if it was written as finance required for planned investment is 14,448(net of issue cost) and issue cost is 3%.

does the same treatment should be done.

Kindly explain.

further if it was done like this as published then why the issue cost wasn’t made the part of finance raised while calculating PV Tax Shield.

Sir, in the same question why the machinery cost of 3,000,000 deducted from 400,000 at which it sold while calculating TAD on straight line basis.

further if for e.g it was stated that machinery realizable at the end was 400,000.
OR
further if for e.g it was stated that machinery residual value at the end was 400,000.

does the same treatment is done.

kindly explain