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Investment appraisal

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Investment appraisal

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by AvatarJohn Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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  • July 26, 2019 at 9:43 pm #524991
    Avatarmaan87
    Member
    • Topics: 119
    • Replies: 155
    • ☆☆☆

    Hi sir:
    Please help me with the following question.

    Sir to calculate payback’ net present values and IRR’ we take in to account cash flows rather than book profits. To calculate cash flows we take profits before depreciation as depreciation is non cash. Sir can we take credit sales when calculation cash flows or just cash sales?

    July 27, 2019 at 9:10 am #525024
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54846
    • ☆☆☆☆☆

    You take all sales – cash and credit. Credit sales still result in a receipt pop cash.

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