• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exams

How was your exam? Comments & Instant poll >>

20% off ACCA & CIMA Books

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

Adjusted Present Value (APV)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Adjusted Present Value (APV)

  • This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 13, 2021 at 6:23 pm #625186
    siwela1
    Member
    • Topics: 24
    • Replies: 17
    • ☆

    When discounting tax shield on borrowing and subsidy loan benefits, various rates can be used which include:
    1)Normal % of borrowing
    2)Risk Free % (as per govt treasury bills)
    3)Govt Debt Yield %

    In Burung, examiner answer used normal borrowing % for discounting, to reflect the default risk of the company.

    He stated to explain the assumptions made if one of the other rates are used.

    Can you explain what these other assumptions are?

    June 14, 2021 at 6:40 am #625222
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    I do explain in my free lectures on APV !!!

    The risk attaching to the tax saving can be argued to be risk free, in which case it would be sensible to discount at the risk free rate (and the yield on government securities is as usual the nearest to a risk free rate).

    It can also be argued to carry the same risk as the debt interest, in which case it would be sensible to discount at the normal return to investors on the borrowing.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Lekhanaa on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • wZaidhan on Sources of Finance – Islamic Finance – ACCA Financial Management (FM)
  • manahylilyas on The financial management environment – ACCA Financial Management (FM)
  • poojam on Objective of financial reporting – ACCA Financial Reporting (FR)
  • mm3677 on IAS 16 Accounting for a revaluation – CIMA F1 Financial Reporting

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in