ACCA Examiners Report March/June 2023

Togue Co is investigating how often it should replace its company car fleet. It is
considering replacement every two, three, four or five years. Cash flow estimates
have been compiled and the following negative NPVs have been obtained, based on
Togue Co’s cost of capital of 11%:

Years to
replacement Negative NPV
$
2 149,308
3 209,142
4 254,893
5 310,860

Using the annuity tables provided, if Togue Co adopts the optimal replacement
cycle, what will be the equivalent annual cost (to the nearest dollar)?

2 year cycle = 149,308 / 1.713 = $87,162
3 year cycle = 209,142 / 2.444 = $85,574
4 year cycle = 254,893 / 3.102 = $82,170 (lowest)
5 year cycle = 310,860 / 3.696 = $84,107

The correct answer is $82,170

I however get £82171. In the answer it states round to the nearest dollar. £254893/3.102 = 82170.5351386203. Would this not be rounded up?? I understand this isn’t a mock question but it is a real exam question and I’m wondering if my answer would have been marked wrong had I of put that?

Thanks,
Chloe