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Cash flow

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Cash flow

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
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    Posts
  • June 2, 2021 at 11:18 am #622769
    vavneetb
    • Topics: 170
    • Replies: 123
    • ☆☆☆

    When in question they say, payment starts from end of year 1 will it come
    In year 1 or year 2?

    June 2, 2021 at 3:59 pm #622794
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49598
    • ☆☆☆☆☆

    When discounting, time 0, time 1 etc are not years. They are points in time that are 1 year apart.

    Time 0 is the start of the first year.
    Time is 1 the end of the first year / start of the second year
    Time 2 is the end of the second year / start of the third year
    etc..

    Therefore a flows at the end of the first year is at time 1 and needs 1 year discounting.

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