APMEVA Calculation - June 2014 Question 1(iii)

Hi, You should start with the operating profit, not PAT, since interest (finance costs) need to be omitted (they are part of WACC) and tax amount in the question does include clearly deferred tax elements (so tax paid <> tax 2,100,000 vs 2,512,993). You add back: Marketing capitalised 3,819,000 (long-term brand building) You deduct: Tax paid 2,100,000 Lost tax relief on interest 200,250 (801,000 x 25%) Hope it helps

Hello there.. if u start with PAT, u need to add the tax expense as per the income statement in the end, to get the answer. I.e PAT= $ 7,538,977 Add back ( tax on interest) {0.75 *801,000} Add back marketing expenses $3,819,000 Deduct tax paid (given) (2,100,000) Add back Tax expense from Income statement I.e 2,512,993 your adjusted NOPAT is $12,371,720

Hi, u know that 30% means 30/100. so,[Debt= 30]/[100 =(equity)] There total of debt and equity is 30 +100= 130 Simple.

I do agree with you on this one :) cheers and goodluck