Hi
I note that some questions inflate cashflows from year 1 and some like Dec Mock from Y2, how can I guess?
I note that some questions inflate cashflows from year 1 and some like Dec Mock from Y2, how can I guess?
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NPV with inflation
15y ago#1Hi,
Kindly specify which question you are referring to ?
Generally speaking, the answer to your question will be guided from READING THE QUESTION requirements carefully.
Regards, Kevin Kelly
Kindly specify which question you are referring to ?
Generally speaking, the answer to your question will be guided from READING THE QUESTION requirements carefully.
Regards, Kevin Kelly
Q25 & 26 in the BPP R&R - inflation starts inY1, the Dec Mock it starts in Y2
It'll be in the question normally
- if it says inflation in 5% and current cost of labour is $10. Cost in Year 1 will be $10.50.
- if it says cost of labour in Year 1 is $10 you don't inflate until Year 2.
Reading time is key for identifying this stuff - but if you can't tell assume and state the assumption.
- if it says inflation in 5% and current cost of labour is $10. Cost in Year 1 will be $10.50.
- if it says cost of labour in Year 1 is $10 you don't inflate until Year 2.
Reading time is key for identifying this stuff - but if you can't tell assume and state the assumption.
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