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i have one question in past ppr December 2009
ASOP CO. Part (B) when calculating NPV we will add license fee as a fixed cost in calculating
operating cash fows??i’m a bit confused my NPV is different than Examiner’s because he had done with a different method but
he added a note which says: (“including the financing cashflows in the NPV evaluation and discounting them by the WACC of 11% is also acceptable”)The examiners answer is the best (have you watched the free lecture on lease & buy)?
His note is meaning that if you had included all the financing cash flows (so not just the license fee, but all of them) then he would have accepted it.
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