Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Flit co long term loan
- This topic has 5 replies, 2 voices, and was last updated 3 years ago by John Moffat.
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- December 29, 2020 at 3:19 pm #601139
Hi sir can u pls explain since the loan receipts occur at the beginning of march, why dont we show that at the end of feb.. what i understand is that this is only done in investment appraisal computation? For cash forecasts the timing doesnt matter it is always to be included in the month it is occuring?
December 30, 2020 at 8:40 am #601163Please tell me where to find the question Flit !!
Is it a past exam question or is it a question in the BPP Revision Kit?
December 30, 2020 at 8:43 am #601166Im sorry it is from dec 14 ques no. 1
December 30, 2020 at 9:07 am #601170The question wants to know the cash balance at the end of each month. Given that the loan was received in March, it does not affect the cash balance at the end of February – it only affects the balance at the end of March.
When in March the money is received is of no relevance.
If we were doing an NPV calculation then certainly it would make a difference as to whether it was received at the beginning or end of the month, but we are not discounting here (and would not be required to anyway because it would mean discounting monthly).
December 31, 2020 at 9:47 am #601213Ok Thank you so much Sir!!
December 31, 2020 at 2:29 pm #601224You are welcome 🙂
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