Deffered consideration , cost of capital Q47 Patronic bppForums › ACCA Forums › ACCA FR Financial Reporting Forums › Deffered consideration , cost of capital Q47 Patronic bppThis topic has 2 replies, 3 voices, and was last updated 12 years ago by sarmadkhalid45.Viewing 3 posts - 1 through 3 (of 3 total)AuthorPosts November 28, 2012 at 11:23 am #55868 fairy :) MemberTopics: 12Replies: 16☆why is a cost of capital of 10% for 2 yrs, of £43560, calculated as “43560 x(1/1.21) “i dont understand the (1/1.21) ???? help pleaseee November 28, 2012 at 12:20 pm #109103 Sangria9MemberTopics: 25Replies: 285☆☆☆This denominator represents discounting for 2 years for 10%. its 110%*110%, or 1.21If you have to do this for 3 years, you would have 110% * 110% * 110%, or 1/ (1.1. in the third degree). December 2, 2012 at 1:34 pm #109104 sarmadkhalid45ParticipantTopics: 8Replies: 19☆As sangria said right, our formula for present value is : present value=F*1/(1+r)nWhere “F” is the factor , “r” is rate of capital and “n” is the period .There “n” use as the power of brackets..AuthorPostsViewing 3 posts - 1 through 3 (of 3 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In