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BPP KIT QUESTION 85 OSCAR COMPANY (SEPT/OCT 18)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › BPP KIT QUESTION 85 OSCAR COMPANY (SEPT/OCT 18)

  • 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)
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  • February 28, 2022 at 6:45 am #649489
    shaunak22
    Participant
    • Topics: 220
    • Replies: 41
    • ☆☆☆

    question (a) – calculate the cost and benefit under each option 1 & 2

    DOUBT – in option 2 while calculating the increase in finance cost how did we get the figure 2310370 . the sales are 28m so should the increase in finance cost be
    (28000000*0.8*(0.09-0.07))=448000 ?

    February 28, 2022 at 8:17 am #649497
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    The workings are shown in option 1 – the revised average receivables under both options are 30/365 x $28m.

    February 28, 2022 at 11:10 am #649505
    shaunak22
    Participant
    • Topics: 220
    • Replies: 41
    • ☆☆☆

    sir whenever the factor advances us certain percentage of sales do we always calculate the interest on such advances using receivable figures? not sales figures?

    February 28, 2022 at 4:22 pm #649518
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    Yes – do watch my free lectures on this.

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