[hellohi]

Sales June July August September October

Credit Sales (Pay in 1 month) 1,200.0 900.0 1,360.0 1,160.0
Credit Sales (Pay in 2 months) 1,500.0 1,125.0 1,700.0
Credit Sales (Pay in 3 months) 300.0 225.0

Purchases
1 month in advance 900.0 1,360.0 1,160.0 1,320.0 1,120.0
2 months in advance 900.0 1,360.0 1,160.0

The firsr line for purchases i understand as it takes 40% of the followingg moths sales amount – so 40% of 2250 which is sales in July is the purchases is how we get to the number in june for purchases which is 900, then 1360 etc.

However for the 2months purchases line it starts with 900 beginning in August, then 1360 in Spetember, then 1160 in October, what is the calculation to this exactly ? These are then the only numbers taken down in the cash flow forecast below in the ACCA answer. Please clarify and explain.

[hellohi]

Can you help now please, if Purchases are on two months’ credit, then in November wouldnt the amoutn due be for the September and October ? rather than october/november ?

[hellohi]

Are you able to help please or another tutor?, i will not be able to ask them during the debrief the questions

Also for question 33 for the cash flow forecast question, it states:

Purchases are on two months’ credit. Purchases are made one month in advance of sales, the average margin achieved is 60%. Fixed costs are paid in the month in which they are incurred. 80% of labour costs, are paid in the month, while the remaining 20% are paid after one month.

Why does it repeat the first line but only starting in September,

Purchases June July August September October November December
1 month in advance 900.0 1,360.0 1,160.0 1,320.0 1,120.0 1,240.0 –
2 months in advance 900.0 1,360.0 1,160.0 1,320.0 1,120.0

please can you explain why for the 2months line it is 900 starting in August then 1360 etc

[hellohi]

Please can you explain why they have added back 16.5 for years 1-5, there is 25% straight line depreciation, on a 330 m investment

[hellohi]

a) For the proposed investment in the new stores, calculate the following:

(i) Net present value; (5 marks)

(ii) Internal rate of return; (2 marks)

(iii) Payback period; and (1 mark)

(iv) Return on capital employed (accounting rate of return) based on the average investment. (2 marks)

In relation to the March 2025 Mock in question 31 for NPV, they have included capital allowances of 16.5m for years 2-5 why is this please and what is the calculation ?

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