ACCA December Exams

Post comments & Vote in Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>

Adjusted present value

This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
July 3, 2018 at 11:53 am #460815
Saimon
Participant
- Topics: 123
- Replies: 55
sir,
For calculation of PV of tax shield on interest,
in Kaplan text book it was said that , all financing cash flows are low risk they are discounted at either
– k(d) or
– risk free rate
my question is does this K(d) indicate rate of normal borrowing or subsidised loan????
July 3, 2018 at 2:35 pm #460826
John Moffat
Keymaster
- Topics: 57
- Replies: 54500
Normal rate (pre-tax, of course).
July 3, 2018 at 4:07 pm #460846
Saimon
Participant
- Topics: 123
- Replies: 55
December 2006 Tampem Inc, Requirement a
Sir,
In calculation of tax saving on tax allowable depreciation, in 4th year (which is last year) examiner have calculated TAD based on “applying 25% on WDV” but shouldn’t it be calculated by “deducting realisable value from WDV”
Can you please check this out and explain me the reason????
July 4, 2018 at 8:38 am #460919
John Moffat
Keymaster
- Topics: 57
- Replies: 54500
It is because of note (ix) in the question – it says that the value is after tax as a continuing operation. So the investment is not actually being sold (it is a continuing operation) and the amount is after any tax implications.
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.