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But then if tax impact have been taken into consideration, why still do a balancing allowance computation for machinery?
Hi John,
Please I don’t understand the additional debt needed to acquire Fodder.
Total value of Fodder plus debt obligations is $49,116,500.
If $20m is used to cover part of it, I thought the remainder of $29,116.5 should be sought for. Thank you| QUOTEAugust 15, 2017 at 10:57 am
Hi John,
I’m sorry I don’t understand the answer you
gave. The question asks whether the
acquisition was beneficial to Pursuit Co’s
SHAREHOLDERS.
Recall in Nente Co(June 2011), to arrive at
the added Value for the shareholder, the equity
values were used. I.e.
Equity value of Combined Coy-(Equity value of
acquirer+Equity Value of Target+ acquisition
premium )=Value added
But now in Pursuit Co, the total MV(debt
inclusive) was used to calculate the value
added from acquisition of Fodder.
Please can you explain how the collar hedge works, i dont just get it. Thanks.
Hi john, goodevening. Please when is basis added or deducted to calculate lock-in rate…
I have, sorry about that. Got confused at some point. Seen my mistake. Thanks a lot.??
Hello john, another question please. Where you are given capital allowance on a reducing balance of 25% per annum, on a capex of $400,000 and residual value of $300,000 for 5yrs, Tax rate @40%.What will the balancing allowance or charge be for yr 5. Thank you.
Hi john, when debt capacity increases as a result of the project being undertaken, does it affect subsidy? For eg, for a project of 5yrs, a loan of $800,000 with interest rate of 6%(subsidized rate) increased debt capacity of $1,000,000, normal borrowing rate of 8%, tax rate 30%.
Would after tax subsidy be on the theoretical loan of $800,000 or on the increased debt capacity of $1,000,000? Thank you.