June 2015 Q1

Hi John,

I was going through the answers of Q1 part (b) of June 2015. My question is in making the cash flows as per the suggested answer we are taking contribution earned on part sales as a cash inflow for the parent.

My understanding was as this is a group and they have a transfer price on it. Is it really a cash inflow for Parent i.e Imoni Co.? The reason i can come up with is because Yalandwe has taken it as a outflow for tax calculation we have to reverse the contribution part.

Just let me know if my understanding is correct or else i have messed it up.