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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Issue cost
Could you please help me the issue costs treatment for apv calculation ..how we do it
It doesn’t matter whether you include them as an outflow in the base case NPV or subtract them separately later (after the tax benefit on the debt used). The end result will be he same.
As far as how the amount is calculated, it depends on whether they are paid out of the debt raised (which means they raise more than the amount needed to the project and therefore pay more interest and get more tax relief) or are paid out of available cash. If it is not clear which from the question, then do either but, as always, state your assumption.