[rashid1234]

i remember a question in bpp exam kit where the ratio of deb/equity was 30%. This question was asked on this forum not long ago as far as i remember. If it is 30% ,then ve +vd is 130 which means 100 for equity. If it is 100%, then it should have been 200% where 100% for equity. And btw a company financed 100% by debt is impossible lol.

[rashid1234]

any1 removed economic depreciation on the operating lease?

[rashid1234]

if this was not said then we should have added back depreciation 1st then calculate the tax?

[rashid1234]

return phase-discounted at the reinvestment rate
investment phase-discounted at the cost of finance
(when no reinvestment rate is known, cash flows are assumed to be reinvested at the cost of capital since it it the minimum required by investors)

[rashid1234]

That could be a possible scenario for the exam, i hope the examiners doest read the forums lol

[rashid1234]

makes sense, thx mr mike

[rashid1234]

In fact sir, i have never came across such a scenario, thats why im asking what should we do in case this happens in exams.
i think the p2 examiner can think of something plausible to make such a scenario possible.
i guess anything should be possible with acca….

(just some random figures)
Purchase price= 200k
Net assets= -50K

so goodwill = 250k?
doest seem right

[Author]

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