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Thank you so much i got the other ones
Can you help me with this one
Low value asset leased for long term
High value asset leased for short term(12months)
Both donot recognise Right of use asset and lease liability right ?One more question sir
Cost is written lower of cost and NRV
Cost includes all factory ohs allocated to it manufacturing ohs and carriage inwards etc
Nrv (the amount we will recieve -costs to complete and costs to sell) i believe distubution costs comes in cost of selling
What about the storage costs ? It goes in cost or nrv or expensedOne more question sir
I have been doing opentuition notes taking lectures technical articles reading and then both exam kits to pass is it okay because i dont read the study text at allIn wacc wuestion if anyone remebers that while calculating cost of debt i didnot choose the redemption value of ordinary shares because it came out to be 85 where as the nominal value was higher as 100 so i choose 100
Cost of euqity was 13
Cost of pref shares 6
Cost of debt 6 [using irr]In lease there was written full tax relief i dont know what that means but i assume we had to take out tax savings from interest payments as 100000 × 20% = 20000 like we normally do and i think i got buy as cheaper option
Both answers were above 250000 buy and lease
There was an mcq if anyone remebers
It was about the non divisible project where one project could be repeated several times the answers were
98000
91000
84000
100927 somethinh
And the capital was rationed to 154000
My answer came out to be hughest as 98000
There was another mcq where it was about liquidity and profitbaility and had 4 choices
I assume where dicounts were taken were regarded as being profitable and selling things on dicount to remove inventory was liquidityLease vs buy was 10 marks wacc was 10 marks 4 marks for stakeholder ojective and management
6 marks for public issue rights issue and placing
4 marks for lease advanatge over buying
And there were four marks for the circumstances whehn we can use the current wacc in the new proposed projectThe weighted average cost of capital question included ordinary shares pref shares and loan notes and the market value came out to 25000M for ord shares 500M for pref shares and 19000M for loan notes my wacc was 10%
The lease vs buy can anyone tell which discount rate they used they gave us 2 wacc and before tax cost which was 10 % so i used 8 % after tax cost of debtSir i understand that in asset capital pricing model the E(ri) is used to calculate the cost of equity or the shareholders required rate of return
But If we use the above formula
E(ri) = Rf -B(E(rm)-Rf)
Dont we get
3% +1.3(8%-3%)
Answer at the back shows
3%+(1.3×8%)
Why?and sir it would be very generous of you if you couild clear this regarding interest rates divided by 100 and then multiplied by for example 3/12 for 3 monthh period . where will we use this %/100 technique
