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Leave my previous questions.
Kindly explain these
In part a
what are the functions of WTO
In part bWhat was the logic behind training and development cost at year 1 (80 % of production and selling cost and at year 2 (20% of production and selling cost)?
why the working capital was not inflated in the answer @ 8% instead it was translated and discounted? Is it purchasing power parity which have built the inflation into exchange rate? errrr I am hell confusing.
why land and building was taken as 80%? Is it the impact of inflation? What is it?
I have taken only at year 0 (2500+200) 2700 and at year 5 500 Is it a right approach ?
I normally apply tax on taxable profit = [before tax allowable depreciation but after include balancing charge or balancing allowance]. Then I take the tax savings due to depreciation for five years.The net (of tax and tax savings) plus cash flows gives the after tax cash flows. My question is, is it a right approach to calculate or there should be something else. Note that is it easier for me but dont know whether it is right or wrong
Sorry for the long query
Kindly guide meWe do not need a logic for the training and development costs – the question told us to take 80% and 20% 🙂
Working capital is released at the end of the project (as per the question) – there is no reason for it to inflate. We get back whatever we put in.
The question says that the market value of the land and buildings will be 80% of the current cost.
Your approach to the tax is fine.
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