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sir am just trying two compare 2 different questions, but having some bit of correlation. In Yilandwe(june 2015) question, we take the best case scenario so far as our transfer price of $280 and 80% increment in royalty fees, goes. Imani co. is still negotiating, but the examiner seems to have used the optimistic assumption and took the higher rates.
Wheras in Sleepon hotels(dec 05 adapted-Kaplan exam kit), we take the worst case scenario, and assume the realisable value of our asset as lower of $250m and $300m, which is $250m.
Is there merely a difference of assumptions taken? or there is some logic behind them?
In Sleepon we are taking the worst case scenario but then comment on this later. That makes sense.
In Yilandwe there is nothing we can do in the calculations but assume that they will charge the $280 as given in the question. We have nothing else to base any other figure on. Again you could comment in the discussion as to how things would be affected if what they ‘feel’ is wrong.
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