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March 2, 2020 at 4:00 pm
Hello, why do you take in Example 8 (b) the 85 as outflow in Year 0? Wouldn’t the company pay out rather the Nominal than the MV? Thanks
John Moffat says
March 2, 2020 at 5:08 pm
Nobody is paying out anything because the debt has already been issued.
As I explain in the lecture, we are looking at the existing debt to determine what return investors are currently requiring because if we issue new debt then we are going to have to offer the same return. We find out what return they are currently required by looking at the return on the existing debt borrowing.
April 17, 2019 at 2:14 pm
An item of plant with a carrying amount of $240 000 was sold at a loss of $90 000 during the year. Depreciation of $280 000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 2018. PTC uses the fair value model in IAS 40: Investment Property. There were no purchases or sales of investment property during the year
April 17, 2019 at 3:29 pm
This has nothing whatsoever to do with this lecture or to do with anything in Paper FM, and nor have you said what your problem is!
If you have a question then please ask it in the relevant Ask the Tutor Forum.
April 16, 2019 at 4:44 pm
sir can i do it like this below?
cost of capital
wouldn’t be much simpler and accurate? i think i can do the same approach with investors return too
April 16, 2019 at 5:26 pm
For this question, if it is in Section A or B then you can do it that way.
However in a Section C question the examiner expects to you to calculate the IRR as I have done in the lecture (and in written parts of questions expected you to be able to state that it is the IRR).
April 16, 2019 at 5:54 pm
thank you john, really appreciate your effort and dedications. you lectures made acca look easier for me.
April 17, 2019 at 7:17 am
Thank you for your comment 🙂
October 11, 2018 at 4:47 am
hello, coud you please clarify why you chose those two discount factors?
October 11, 2018 at 8:50 am
Have you watched the earlier lecture on calculating the IRR, because it is exactly the same ‘rule’. You can use any two ‘guesses’. I tend to use 10% as my first guess because it is in the middle of the tables.
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