Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › P4 Article – International project appraisal- Part 2
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John Moffat.
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- August 15, 2016 at 10:27 am #333253
Hi Sir, i refer to the article International project appraisal- Part 2 and the PartA NPV asnwer,
i have some queries on the answer:
1. why there is not any tax calculation on the sales proceed of the machine $500.
I under stand the cost is$1,000m and and tax allowable depreciation is only $250.y we no need portioned the sales proceed as $500×250/1000=$125. and use this $125 figure to calculate the balancing charge?
2. in the question there got mentioned the inflation rate in ayjai is 2.75%. and the question also mentioned the $ will devalue 5% pa. why we just ignored the inflation rate in the exchange rate calculation?
And, where can we download the rest of the answer , it seems that the articles didn’t provide the answer for part c & d. i tried to search from google but can’t get it.
August 15, 2016 at 4:18 pm #3333421. It is because the question says that the only allowable amount is based on the 250. There is never tax on the sales proceeds (unless the question specifies otherwise).
The idea of a balancing charge or allowance is a sensible one (this article was not written by the examiner) but because there were no details of how it would work, the writer has simply ignored it.2. That fact that the question says that the $ will devalue by 5% presumably already takes into account any affect on inflation.
I am afraid that the articles listed on the ACCA website are all that are available.
(This article is not really very satisfactory – mainly for the reasons that you have identified. Thankfully it was not written by the examiner 🙂 )
August 15, 2016 at 4:53 pm #333363Thank you Sir 🙂
August 15, 2016 at 4:57 pm #333366You are very welcome 🙂
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