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no mistake in reproduction
bpp kit question:
”
Branch acquired an item of PPE on a finance lease on 1 jan x1. the terms were:deposit: 1150
installments: 4000 pa for 7 years in arrears
cash price: 20000useful life: 4 years and interest implicit 11%.
”
we are supposed to make the extracts for 31 dec x1
—-the answer uses the cash price as the cost of the asset. but i calculated the individual pvs for each year and came up with 18849.
4000/1.11 =
4000/(1.11)^2 =
4000/(1.11)^3 =
and so on—-
where am i going wrong?
joys of self study prep!!!!!
OH wait!!!!
if we do 20000-1150=18850, which is the same the pv. does this have anything to do with using the 20000?
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