FUBUKI CO (DEC 2010)

This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
August 28, 2018 at 12:13 pm #469825
globasd
Member
- Topics: 10
- Replies: 1
question is merely asking us to evaluate on financial grounds.

Usually how do we know whether to calculate simply APV only ? or NPV and APV ?

do we make assumption based on the given information ? if maybe (just assuming), cost of debt isn’t given ( and only cost of equity is given ) we just assume the question is asking us to calculate APV ?
August 28, 2018 at 7:33 pm #469883
John Moffat
Keymaster
- Topics: 57
- Replies: 54859
APV is better when there is a major change in gearing, and there is in this question. The other clue is mention of debt capacity in the question, because it is only relevant when calculating the APV.
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.