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hwo to calculate the write down value at the end of Year 5 is 31? I think the formula is:
800*0.5*0.6*0.6*0.6*0.6=51.84Thanks a lot!
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Oliviachen, you need to include an extra year:
20X8 – 50% allowance
20X9 to 20Y3 – 40% allowanceAt the end of 20Y3 WDV = 800*0.5*0.6*0.6*0.6*0.6*0.6=31.10
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Hi, could someone please let me know how the sale of capital equipment is 2.67?
Thanks.
@jetta said:
Hi, could someone please let me know how the sale of capital equipment is 2.67?Hai,
As you know the residual value after 5 years of operation is $ 40m and the WDV is $ 31.1m, so the profit on sale of equipment is $ 8.90m (40-31.1)
Tax rate is 30%
As we are calculating the tax effect, only the tax on the profit on sale is to be taken, ie; $ 8.90m * 30% = $ 2.67m.
I hope you got the point.
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Thanks Priyak, that is very helpful. Can someone also please help me out on the calculations in the answers under “tax savings on annual interest” and “discounted value of tax shield on interest” and “cost of financing”?
Sorry, I am self studying this course, and I find it hard to solve these problems myself. They give the answers but don’t let you know how they calculate it…argh..
THanks in advance.
@jetta said:
Can someone also please help me out on the calculations in the answers under “tax savings on annual interest” and “discounted value of tax shield on interest” and “cost of financing”?Hai there again.
I have my way of calculating the APV that I have made in a word doucument which maybe simple to understand. Copy pasting wont align the figures properly. If there is another source that I could send you ie by e-mail then guess you could have a look at it. Hoping that maybe it could clear out your doubts.Hai Jetta
I tried posting in the part (a) of the question but it looked weird and would confuse you only as it is difficult to align here.- Topics: 0
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No worries Priyak, I think I am already confused from all this studying haha. But I think I got it from looking through the past forums. Thanks so much!
Good that you are cleared off the doubts.
However you could have a look at Sunil Bandari’s notes also where he have provided solutions to many recent past question papers.
Hai Delfia,
Follow this link
https://www.intelligentaccountancytutorsltd.co.uk/You just have to give ur details and then you can get a copy.
Or else it is circulated thru e-mails in the P4 Group you could get a copy from them directly e-mailed to you
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