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There is this nagging question that has been destroying my npv since the beginning of afm studies. That is, when there is 10% TAD on machinery, and its straight line, they don’t deduct the residual value and then apply the 10% charge. on the other hand when say its for 4 years straight line. They do deduct the residual value and then simply divide by 4.
Why this difference? Thanks!perfect, thankyou!
Also, when issue costs are not tax deductible, there is no tax saving for issue costs in apv, right? ThanksCan you kindly compare it to Hav Co where again instead of a combined share price they have taken just the share price of hav co to value strand co premium? specimen sept 2018
Please also tell why in this same question the interest is calculated at the loan amount outstanding at the start of the year? Will this always be the case in such questions, becuase bpp hasn’t mentioned on what amount interest have to be calculated, just calculated it on the start of year amount?
it says
choice is to be made between,
historic earnings growth is 12%
then it gives an average revenue growth rate of 5.33%
finally the growth rate we have calculated using g=br which is 7.26%i understand why we choose the rate that we do.
I am having confusion in this model;Do(1+g)/ke-g
the growth rate used is earnings growth rate as i have mentioned above. Is this always the case?
0.25(1.0726)/0.096-0.0726
thanks
Please also tell me why we are receiving tax on losses made. Why aren’t the losses being being subtracted from future profits?
Kindly also tell me, do the retained earnings of 4500 get cancelled on the MBO?
Uh. I actually forgot to add 0.5. The answer is now correct. Kindly close the thread.
sorry for intruding here John, but I am confused here.
When Tanzanian seller receives 200000 Ugandan shillings. It will sell 4 ugandan shillings for which it will get 1 tanzanian shilling. So the receipt shouldn’t be 200000/4=50000 tanzanian shillings? Why are we multiplying here?
ok, thankyou. Makes sense! wish there was a systematic way to find exchange rates though.
we have done this because we are going to use the JPY loan to buy euros(sell JPY and buy euros) and then we hypothetically sell those euros to buy ARD for investment into the project?
shouldn’t we instead be selling ARD to buy JPY instead?( the ARD we have receive from the project sold to purchase JPY that we need to remit to home country Japan) and hence 95.6/129.2?