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December 2014 Question 1 (a)(ii)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › December 2014 Question 1 (a)(ii)

  • This topic has 2 replies, 2 voices, and was last updated 8 years ago by kylerlu.
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  • August 31, 2016 at 11:43 am #336517
    kylerlu
    Member
    • Topics: 84
    • Replies: 117
    • ☆☆☆

    Hi Sir Ken!

    Under ‘acceptability’ it says that the Roam Group Co. “carries small risk in acquiring Godiva Airport as the cost of the acquisition is relatively small and any operating losses could be easily absorbed”.

    If there was no specific mention of the acquisition cost in the case, how do we determine the acquisition cost and judge whether this cost is material to an acquiring organisation?

    Hope to hear from you soon.

    Best regards,
    Kyle

    August 31, 2016 at 3:33 pm #336560
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10597
    • ☆☆☆☆☆

    $7m is mentioned just below Table 2.

    The figures in Table 1 are in millions and the cost of $7 million is very small compared to those.

    September 1, 2016 at 7:45 am #336728
    kylerlu
    Member
    • Topics: 84
    • Replies: 117
    • ☆☆☆

    Oh yeah it’s there. Thanks for pointing it out Sir Ken!

    Best regards,
    Kyle

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