• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

initial investment – NPV

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › initial investment – NPV

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 28, 2020 at 9:56 am #596816
    misbahkiran
    Participant
    • Topics: 109
    • Replies: 194
    • ☆☆☆

    Hi Sir Good day

    I have a question regarding cost to include in initial investment.

    Can you please guide if we can include following cost in initial investment appraisal of “Customer database management system”

    1. Initial capital outlay.

    2.Sales tax on the purchase price recoverable through the Noria tax authorities. – Installation and system testing costs.

    3.Staff training on the CDMS.

    4.Five-year maintenance and support contract with the supplier.

    November 28, 2020 at 10:46 am #596830
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54671
    • ☆☆☆☆☆

    In future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.

    In NPV questions you include all cash flows on the date when they occur.

    So the initial capital outlay is an immediate cash outflow.

    Sales tax would only be relevant if the question says there is a delay in recovering it (in which case there would be an initial outflow and then an inflow when it is recovered).

    Staff training is an outflow when it is paid for (which might be immediately but it depends on the wording of the question).

    The maintenance and support contract will presumably be an amount payable each year in which case it is an outflow each year and not immediate (but again it depends on the wording of the question).

    November 29, 2020 at 9:03 am #596978
    misbahkiran
    Participant
    • Topics: 109
    • Replies: 194
    • ☆☆☆

    Thanks a lot sir for comprehensive explanation.

    and

    Sorry for the silly mistake. I really appreciate your response on student queries.

    November 29, 2020 at 9:08 am #596980
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54671
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘initial investment – NPV’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • hana1992 on Foreign exchange risk management (2) Part 1 – ACCA (AFM) lectures
  • John Moffat on Overcapitalisation and Overtrading – ACCA Financial Management (FM)
  • ISABIRYEZA on Overcapitalisation and Overtrading – ACCA Financial Management (FM)
  • ISABIRYEZA on Overcapitalisation and Overtrading – ACCA Financial Management (FM)
  • huunghia18499 on Foreign currency- Functional currency – ACCA (SBR) lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in