• 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 >>

BPP 2021 160 Pinks Co

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › BPP 2021 160 Pinks Co

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • July 1, 2021 at 10:12 am #626785
    buondaiqua
    Member
    • Topics: 22
    • Replies: 18
    • ☆

    Hi,
    I’m doing the question case 160 Pinks Co in the Kit BPP 2021 and I have a question relating to the real net present value of Pinks Co’s investment project.
    Everything is ok with the nominal net present value but when I calculate the real net present value, I saw that in the BPP’s answer, the real net cash flow was calculated by using the nominal cash flow after tax then deflated by inflation rate and then discounted by the real after-tax cost of capital.
    However, my teacher calculated the real net present value by using the nominal taxable cashflow and then he deflated by the inflation to get the real taxable cashflow. From that, he calculated the tax payment by multiply the real taxable cashflow with tax rate of 26%, the tax benefit was kept the same as under the calculation of nominal cashflow as he said that tax benefit is not affected by inflation rate.
    I wonder that whether my teacher is right or the BPP ‘s answer is correct since I think the difference between the two solution is that the tax benefit is whether affected by inflation or not

    July 1, 2021 at 4:19 pm #626806
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    Your teacher is right, and that is what the examiner’s own answer does. However the examiner made it clear that either approach would get full marks.

    (To be honest it was a bit of a silly question for the examiner to ask because nobody would do both parts (i) and (ii) in real life 🙂 )

    July 2, 2021 at 4:13 am #626818
    buondaiqua
    Member
    • Topics: 22
    • Replies: 18
    • ☆

    Thank you so much 🙂

    July 2, 2021 at 7:42 am #626833
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘BPP 2021 160 Pinks Co’ is closed to new replies.

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

  • EricObi on IAS 37 – Best estimate – ACCA Financial Reporting (FR)
  • Ken Garrett on The nature and structure of organisations – ACCA Paper BT
  • John Moffat on MA Chapter 4 Questions Cost Classification and Behaviour
  • maryrena77 on The nature and structure of organisations – ACCA Paper BT
  • vi234 on MA Chapter 4 Questions Cost Classification and Behaviour

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