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With regards to the capital allowance of the construction cost, the first year should amount to 930 mil pounds, right…?
However should we assume this tax savings to occur at the end of Year 1 or Year 2…?
thanks…
Yes – the tax saving on the first capital allowance is 930M
Tax is payable in the year the flow arises and to the first saving is at time 1.
Sir, with respect to this same question , how was the nominal cash flows figures arrived at in part (a) in the Return phase.
Real cash flows 52 490 2242 928 928
Nominal cash flows 54.63 527.68 2474.75 1049.95 1076.20 ??The real flows have been inflated at 2.5% per year to get the nominal cash flows.
The first flow (52) is in 2 years time, so 2 years inflation is 52 x 1.025^2 = 54.63
Similarly for the other flows.
Hi all,
When we use purchase power parity theory to forecast exchange rate, we have to correctly identify the home country and the foreign country, right…?
Just wondering in this question, between UK and US, which is the home country and which is the foreign country…?…is there any indicator in the question on this…??
Sir John
In the same question using PPT the value of S1 from the formula is 1.53 but in
printed answer in Kit taken 0.654 . Similar with S2 value 1.56 but in
printed answer in Kit taken 0.6410.some sort of exchange indirect code taken.
Sir what is it & why it is taken.
I am confused.
in this question how i will know we have to revert excahnge currency dollar / sterling spot rate , i mean in the other question when i need to revert exchang rate currency
Stacie : Elias answer is correct
uuuu: I have answered the same question asked by you elsewhere a few minutes ago – please do not post the same question twice.
airyami: the quote tells you which way the currency is being quoted. In Blipton you do not actually need to change the quote by inverting – you can either multiply by the given quote or divide by the inverted quote. It gives the same result!
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