hello sir. Hope you are doing well. calculation of increase in fuel tax is collected from acca answer which is 1.31% = 70% * (3/160). can you please explain where that value of 3 and 160 come from?
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dec 16 q2 part a
9y ago#1Note 4 in Appendix 2 says:
"The rate of tax levied by the Ceeland government on the cost of fuel which Luxury uses to power its fleet of delivery vehicles is due to increase from 60%, which it has been for many years, to 63%"
So, if a unit of fuel without tax cost $100, a unit with tax used to cost $160. Now it would cost $163. Therefore the increase is 3/160 of the old tax-inclusive cost.
Hi Ken, for Dec 16 Q2 (a), for the exchange rate, is it correct to get 6.67% by using 0.1/1.5?
Is this the correct concept?
9y ago#3Yes, 0.1/1.5 as 6.67% reduction is correct. I think it's easier to see as follows:
In the budget, buying goods costing V$1,000 would cost 1000/1.4 = 714.28 C$
The exchange rate will change to 1.5, so the purchases of 1000 will now cost 1000/1.5 = 666.6
The cost in CS has gone down from 714.28 to 666.66, a decrease of 47.61, which is 47.61/714.28 = 6.67%.
Thanks a lot Ken ?
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