ACCA December Exams

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Dec 2018

This topic has 1 reply, 2 voices, and was last updated 2 years ago by Ken Garrett.

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June 4, 2022 at 2:20 pm #657352
Noah098
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Doubt 1- Sir, in December 2018 paper 1)b) I wanted to understand how is 13.2% ROI? I am getting 10.6/90=11.7%
Doubt 2- 11.7% is also the rate by which the cost of investment can increase before the NPV starts to turn negative, is it correct?
Can you pls explain….
June 5, 2022 at 9:06 am #657409
Ken Garrett
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10,565/80,000 = 13.2
To eliminate the NPV it has fall by 10,565 so as a % of initial investment that is 13.2.
There is an argument for putting 90,000,000 on the hottom line of both calculations.
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