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Kim Smith.
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Noah098
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The nature of the assumptions, that is, whether they are best?estimate or hypothetical assumptions – in this case it seems likely that they will be best estimate assumptions as Narley Co expects to obtain finance in order to fund its planned expansion.
ma’am from your notes I understood that major difference between hypothetical and best estimate assumptions is that in case of former, the event is not likely to occur while in case of latter the probability is much higher/most likely to occur.
here in this question nowhere is it written that the company expects the loan to be financed…so then how can we say that it is best-estimate example?
Kim Smith
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A student sits the AA exam. They omit to answer a 20-mark question. Hypothetically, they could get 80%. The students best estimate is that they scored 60%.
Which mark will they expect? 60% or 80%?
Noah098
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