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Hi John,
In question b I don’t understand why Kilenc should use NPV to appraise investment (instead of APV) when Kilenc will be investing in another country, it’s operating and gearing level will definitely change.
Thank you in advance.I don’t understand your question, because part (b) of the exam question is about dark pool trading. There is no mention anywhere in the question or answer of using NPV (or APV for that matter) to appraise the investment.
Kaplan must have amended the question, but I only have a BPP Revision Kit (not the Kaplan Exam Kit) and so I can’t help without seeing exactly how they have amended it.
However from what you have written it does seem as though APV would have been the better approach (unless they put something in the question that was effectively requiring you to calculate the NPV).
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