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Hello Tutor, for PYQ DEC 2018 Q1 PART (C)(i) : estimate the value of equity of Opao co and Tai Co
For Tai Co
1)I calculate the sales revenue at 5.02% growth after the first year for the second year is different from the examiner answer which is 7730 in year 2 and year 3 is 8135, is it still correct?2) and I use a different method to calculate the free cash flows which I had an account for the depreciation amt which equals to the investment amount( deduct from the PBT and obtain the taxable profit and calculate the PAT) and the depreciation amt not added back as the investment amt will cancel out, is this method is still valid even though the answer different from examiner answer?
Hope you can clarify for me, thank you in advance 🙂
1. Your figures are not correct – the examiners answer is correct!!
The revenue is 7,351 at time 1.
At time 2 it is 7,351 x 1.0502 = 7,720
At time 3 it is 7,351 x 1.0502^2 = 8,108I don’t know how you arrived at your figures.
2. Yes, what you are doing is valid (and possibly more valid than the examiners answer 🙂 )
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