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Calculating Investment Appraisal with Inflation rates

Forums › ACCA Forums › ACCA FM Financial Management Forums › Calculating Investment Appraisal with Inflation rates

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by AvatarJohn Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 20, 2018 at 7:21 pm #468649
    Avatarkayanvis
    Member
    • Topics: 2
    • Replies: 0
    • ☆

    I don’t know how to calculate Inflated prices when the selling price per unit are different each year. For instance:

    Year 1- SP=$15/unit
    Year 2- SP=$18/unit
    Year 3- SP=$22/unit
    Year 4- SP=$22/unit

    Selling price inflation is 4% per year

    P.S: I know how to calculate Inflated prices when the prices are the same. Different prices are a confusion.

    Please Slove this for me?

    August 21, 2018 at 6:34 am #468677
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54846
    • ☆☆☆☆☆

    You multiply the selling price by 1.04 for 1 year.

    For 2 years you multiply the selling price by 1.04^2

    and so on

    This is all explained in my free lectures 🙂 The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.

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    Posts
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  • The topic ‘Calculating Investment Appraisal with Inflation rates’ is closed to new replies.

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