cost of InvestmentForums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › cost of InvestmentThis topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.Viewing 2 posts - 1 through 2 (of 2 total)AuthorPosts June 16, 2017 at 9:47 am #393300 mansoorParticipantTopics: 424Replies: 542☆☆☆☆Good morning Sirthis is more of a revision question:if there is a deferred payment of, lets say, 24m in 3 years and the cost of capital is 10%, the unwounding entries will be as follows:PV = 24/1.1^3=18myear 1: Dr Finance cost —- 1.8 (18 x 10%) Cr Def Liab ———– 1.8year 2Dr finance cost —- 1.98 (18 x 1.1 X 10%) Cr Def Liab ——— 1.98year 3Dr finance cost —- 2.39 (18 x 1.1 x 1.1 x 1.1 x 10%) Cr Def Liab ——— 2.39correct?thanks in advance June 16, 2017 at 10:54 pm #393341 P2-D2KeymasterTopics: 4Replies: 7093☆☆☆☆☆Hi,Yes, it is correct but I think you may have multiplied by 1.1 one too many times in the third year.ThanksAuthorPostsViewing 2 posts - 1 through 2 (of 2 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In