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BPP Practice Kit – Seal Island

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › BPP Practice Kit – Seal Island

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 24, 2018 at 9:16 pm #479695
    carlosf25
    Member
    • Topics: 8
    • Replies: 9
    • ☆

    In the solution, under a (iii) sensitivity analysis, decommissioning costs must increase by $122.2/0.1571. Kindly explain how we get 0.1571.

    October 25, 2018 at 9:10 am #479748
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    It is (1.04/1.1)^33)

    1.04 because there is inflation of 4% per year; 1.1 because the cost of capital is 10% per year; and 33 because it is in 33 years time.

    October 25, 2018 at 9:38 pm #479813
    carlosf25
    Member
    • Topics: 8
    • Replies: 9
    • ☆

    Thanks Mr. Moffat.

    October 26, 2018 at 10:43 am #479857
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘BPP Practice Kit – Seal Island’ is closed to new replies.

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