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Hello, pls concerning the above named question, why was the 4million pounds worth of new machinery not included in the licensing option? I assumed it would be an inflow to partsea since it sold the machine to the licensee.
The question is very badly worded.
Although the question says they ‘would sell the $4m new machinery to KBD’, it does not strictly mean that they charged them $4m for it.
(The $4m new machinery makes it clear that it is the same machines mentioned in the previous option – they cost Partsea $4m).It does say they they ‘sell’ but it doesn’t say how much they sold the machinery for.
In fact (and this is why it is so badly worded) it didn’t mean that they actually got money for it, but that they receive the license fee etc.. (If you think about it, the other company would be mad to pay for the machine and also pay the license fee etc..)
However, it was terribly badly worded, and so if you had brought in the $4m as a receipt the examiner would have had to allow it.
The question is very badly worded.
Although the question says they ‘would sell the $4m new machinery to KBD’, it does not strictly mean that they charged them $4m for it.
(The $4m new machinery makes it clear that it is the same machines mentioned in the previous option – they cost Partsea $4m).It does say they they ‘sell’ but it doesn’t say how much they sold the machinery for.
In fact (and this is why it is so badly worded) it didn’t mean that they actually got money for it, but that they receive the license fee etc.. (If you think about it, the other company would be mad to pay for the machine and also pay the license fee etc..)
However, it was terribly badly worded, and so if you had brought in the $4m as a receipt the examiner would have had to allow it.
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