I am unable to understand the following additional question available in Kaplan Book, Chapter # 4:
A company buys an asset on the last day of the accounting period for $ 26,000. It will be used on a project for three years after which it will be disposed of. Tax is payable @ 30% one year in arrears, an tax allowable depreciation @ 25% reducing balance.
If possible, use the format, first arrive at tax profits and then net cash flows for discounting purpose.
Thanks.
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NPV - Timing of Asset purchase at the end of an accounting period
8y ago#1I do not have the Kaplan book - only the BPP Revision Kit.
I am not going to do the calculation for you because everything relevant is explained in detail in my free lectures of investment appraisal with tax.
If there is anything specific in the answer in the Kaplan book that you are not clear about then ask.
The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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