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Hello Mike
I am just wondering when PV of cash flows should be calculated. On the Acca technical articles – Financial instruments Part 1 & 2, he discounts cash flows in some cases but not in others?
Thanks
We tend not to discount to present value the receivables and payables, through strictly they should be.
I think it reasonable to assume that the examiner will give you sufficient indication whether you are expected to, or not.
“The company’s cost of capital is 8%” is a good indicator and equally, when no cost of capital is mentioned, then you’re not expected to
Sorry not to be more definitive
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