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BPP MCQ 34.3 investment appraisal

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › BPP MCQ 34.3 investment appraisal

  • This topic has 1 reply, 2 voices, and was last updated 11 years ago by AvatarJohn Moffat.
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  • November 17, 2014 at 4:32 pm #210755
    AvatarAshwin
    Member
    • Topics: 30
    • Replies: 18
    • ☆

    Sir
    why first inflow arise in Year 0?

    November 18, 2014 at 8:53 am #210880
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    There is no such thing as ‘year 0’. Time 0 is a point in time – it is now. Time 1 is one year from now, and so on.

    The question says that the the cash inflows are received in advance, and so the inflow for the first year is received at the start of the year – i.e. now, time 0.
    The inflow for the second year is received in 1 years time – i.e. time 1.
    And so on 🙂

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