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Borrowing cost example

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Borrowing cost example

  • This topic has 5 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • February 4, 2016 at 1:21 pm #299261
    nehashrestha
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Dear Sir,
    In the solution in the borrow column are those amounts cumulative? and sorry to say but i didn’t understand how 20,90,30 and 90 came in Invest column. Could you please make it clear.

    Thanks in Advance.

    February 4, 2016 at 2:49 pm #299266
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    The amount in the borrowed column is cumulative (couldn’t you work that out?!!!)

    The amount in the invest column is the amount of surplus funds. If I borrow 20 and I immediately spend 12 then I have surplus funds of 8 to invest.

    Can you work it out from there on or do you want a complete explanation?

    February 4, 2016 at 3:37 pm #299276
    nehashrestha
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Yes, I got those are cumulative. But yes i will prefer a complete explanation, May be i have the confusion with the terminals, withdraw, spent, invested etc.

    February 4, 2016 at 4:27 pm #299287
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Borrowed 100, spent 50 invested 50
    Spent 30 so investment falls to 20
    Borrowed 120, spent 50 invested 70
    So investment rises to 90
    Spent 60 so investment falls to 30
    Borrowed 80 spent 20 invested 60
    So investment rises to 90

    Can you finish it now?

    February 4, 2016 at 4:43 pm #299291
    nehashrestha
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    Yes, Thank You Sir.. 🙂

    February 4, 2016 at 4:44 pm #299292
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Good – post again when you come across anything else that you don’t understand

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