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Hi John, so terminal value is just the worth of the investment after a specific period of time. It’s not Cash flow. so why we take it into account to calculate the total CF as like in this Q165?
Thank you so much!!!is it because when we calculate tax saving on capital allowance, we already deduct “scrap value” to find out the allowance balance?
I just watched your lecture again, I think because we don’t know if the real sales volume is as budgeted. Besides, From your note, full cost also includes non-production costs so please ignore my question above.
Thank you!!!Thank you.I was exempted from F2 many years ago so I don’t remember much. I’ll watch your F2 lectures.
I have this concern which is not relating to this question. But this will be my computer- based exam after many years. I am afraid I’m gonna lose some marks since MCQs will be marked by the computer, not examiner I think. Like in question 121 Revision Kit, their answer is $11,100. But my answer is $11,000 because on the question said “to the nearest $100”. So I am confusing why their answer is still $11,100 without rounding to the nearest $100 as the question asked. If this question asked “to the nearest $” so I think $11,100 is correct but it’s not the case here. Am I right?
I have watched all of your lectures and yes, you didn’t subtract it when using reducing balance depreciation. I think you also didn’t mention about terminal value. Actually, I only have the revision kit and your Note, I don’t have any Study text so I don’t know what terminal value is, and its role as well as whether to use it in any calculation in FM subject or just ignore it. I just guessed from its name that it’s the final value of the project. I’ll do some research. Thank you!!!
Thank you so much John!!!! I’ve watched all of your lectures. If I remember correctly, you didn’t mention about deflation factor so I guessed this type of question is not so common in the test right? I think I should go watch your lectures again. Watch the series one time maybe not enough to remember everything.
But why we inflate them then we have to deflate them to find the real CFs. I mean why don’t just use CFs before we inflate and discount by the real rate provided?
I calculated PV of future cash flows by figures from the forecast in the question without adding the inflation (Including the Revenue, Variable Cost, Fix Cost, Tax on Opperating CFs, Tax Saved on Captial Allowance) When I have After-tax CFs without inflation, I used discount tables for real rate of 8% and the result NPV = $50,288 (different with the answer on the book).You are an amazing teacher!!! Thank you so much for always response very quickly !! And about where to post, I will do so in the future. When I used the search box, I don’t know if it’s just me that I can only search on the page I’m opening, I can not search this whole FM forums for a specific topic. So I have to open every pages in this forum to see if there is someone asks the same question like me. But there are too many posts that I couldn’t open up them all. Therefore, I thought I should not post on different posts so there won’t be too many posts and it can be easier for other students to keep track of. Anyway, I’ll do as you told me to do in the future.
Could you please explain question 127. Why the answer is lease better than buy?
To calculate NPV of buying we discount the CF after take into account of tax saved on Capital Allowances.
To calculate NPV of leasing we discount the CF after take into account of tax saved on Lease payment.
I don’t understand the question 127, what is the accountant is calculating, especially the part “the lost of capital allowance”Thank you!!!
Thank you so much!!! Please also help me with Question 84 Revision Kit. There is a sentence I don’t understand is “Oscar Co would be required to accept an advance of 80% of credit sales when invoices are raised at an interest rate of 9% per year.”
I read the answer and also don’t understand why “Increase in finance cost = 2,301,370 * 0.8 *0.2”Thank you so much. I have another question. Question 90 and 91 of BPP. I remember on your lecture you said that Depreciation is not Cashflow so it’s not relevant for calculating NPV or Payback period. I think I misunderstood you somewhere so the answers for Question 90 and 91 do take into account of Depreciation. Do you have the BPP Revision Kit newest version? Because these questions are from there. If you don’t have please let me know I’ll type the question down. I really don’t understand the answers please help me!
Thank you both of you so much!!! I will try my best to be able to submit my RAP in May 2021. To get there, I need to pass the required exams and Ethics Module. I am wondering if you provide RAP mentoring services. If so, please send me an email to trucanh134@yahoo.com. I’ll really appreciate it.
Thank you!!!
