Louieed co (mar/jun 16)Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Louieed co (mar/jun 16)This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.Viewing 4 posts - 1 through 4 (of 4 total)AuthorPosts May 29, 2020 at 12:34 pm #572195 AnonymousInactiveTopics: 3Replies: 1☆In part c, for option 2 & 3 they have calculated the opportunity cost for cash surpluses. Then in option 1, why they have not calculated the interest that we will earn from cash surplus that we will have of 220+64 and will not be used anywhere? May 29, 2020 at 3:44 pm #572221 John MoffatKeymasterTopics: 57Replies: 54701☆☆☆☆☆The question says that the debt funding needed will be reduced instantly by the cash balances. So there won’t be any cash to earn interest. May 29, 2020 at 3:49 pm #572227 AnonymousInactiveTopics: 3Replies: 1☆But in option 1 there is share for share exchange so why we will require the debt in this option? May 29, 2020 at 3:51 pm #572228 John MoffatKeymasterTopics: 57Replies: 54701☆☆☆☆☆Sorry – I read your question too quickly and thought you were referring to options 2 and 3 🙁The reason is that the profits after tax will already be including the interest.AuthorPostsViewing 4 posts - 1 through 4 (of 4 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In