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Quest no 2.june 2015
Windor company
In this question how calculate the revised finance costExaminer calculate by this way
2600694 x o.8 x (0.7- 0.5)= 41611
I dont understand the (0.7-0.5) rate.I am used only 7% int rate is it right??
There is more than one way of showing your workings, but both ways give the same answer.
I think the easiest way (and the way I do it in the free lectures) is to show the 7% factors interest charge as a cost, and the 5% interest on short-term finance as a saving. The answer to this question has just netted the two off (7% – 5%)
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