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FM F9 – SPOT Co. (Dec 13) – Kaplan Exam Kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › FM F9 – SPOT Co. (Dec 13) – Kaplan Exam Kit

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  • March 5, 2024 at 1:00 pm #702051
    abirla
    Participant
    • Topics: 4
    • Replies: 3
    • ☆

    Under part(a), when evaluating Leasing – calculation has used 1+4 year annuity for 7% DF

    I am unable to understand this? Can you please explain, how is it 1yr +(1-4)yrs?

    March 5, 2024 at 3:58 pm #702063
    LMR1006
    Keymaster
    • Topics: 0
    • Replies: 1278
    • ☆☆☆☆☆

    The lease of $155000 in payable at the start of the year, which means at to, in advance
    So its 155,000 * 1
    155,000 * 3.387 which is 4 years at 7%

    or 4.387 * 155,000

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