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I’m confused about inflation in NPV question . in some ans , inflation is charged from the 1st year. for example,
selling price $20, and inflation is 3%. so 1st year’s selling price is charged $20.6 in 1st year.
2nd example..
selling price $20, and inflation is 3%. here 1st year selling price charged $20. I could not find out the difference in the question. the question was same.selling price inflation is expect to be 3% per year. .
it would be very helpful if u explain, when should I charge in 1st year.
Reference..
june 08(SC co) , june 05 ARG co.
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in 2005 ARG case : it mentioned [ The standard selling price and standard costs for each product in the first year will be as follows ]. So in first year, inflation not applied yet and will use the data provided.
in 2008 SC co case : it mentioned current price term (e.g., The selling price of product P (in current price terms) will be $20 per unit).
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