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Thanks very much for your responses. That makes sense now although would have helped if they put this in the yr 2 working and I thought it should be 7.2% as per the answer not libor but hey although I was thinking they got 10% discout from somewhere. This exam is a worry! Revision course next week will help a homestudy is tuff!
Hi thanks. I understood that part I just don’t undertand the discount rate to get from 17.63 to 15.87 in yr 1 etc = total discount value of Tax shield 71.63.. Thanks
on subject on Apv I have been working through apv question 5 Neptune June 2008 acca exam. Any ideas how they get the discounted value of tax shield 71.63 with workings please. Appreciate advice. Thanks!
Thanks for your reply. I have a further query. Do we actually buy and sell at the spot as well as the future? When we have to sell the future we buy the currency at spot… I understand this BUT when we buy the future do we actually have to sell the currency at spot? If this sounds a bit of a stupid question apologies but getting a bit mixed with all these terms re Foreign Exchange and Interest Rates! Thanks.