hi i want to ask for Hebac co past year question. Why the answer are not the same as format for NPV that I learn?
In the answer they calculate tax @ 20% for Year 1 and put in column Year 1, while my format says that tax for year 1 should be put at year 2?
So which one is correct?
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Hebac Co Past year Question
4y ago#1The examiners answer is correct!!
The question says that tax is settled in the year in which it arises. Therefore the tax for year 1 is payable at time 1.
It is when the question says that there is a one year delay in paying tax that it would be at time 2.
Have you watched my free lectures on investment appraisal with tax? The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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