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Sir,
In the above subject question while calculating unclaimed capital allowance why on the year
of sale at 6th year instead of B/A the WDA was claimed.Kindly explain
They have included balancing allowance (they have called it unrecovered allowance).
You didn’t need to have WDA in fact – but if you didn’t then the BA would be higher and the final figures would have been exactly the same.
Hi! Please tell me why did they calculate balancing allowance in year 6 when assessing the sensitivity of the project to a $1m change in the initial capital expenditure?
Thanks in advance…
Because if the initial cost changes then all of the capital allowances (including the balancing allowance) will change – the allowances are calculated on the initial cost.
Hi
Pliz explain to me the second part of qstn (a). I thought the sensitivity was the issue of NPV/PV of initial capex but seems am totally lost what is the question requiring and which way are they answering.also i got my NPV correct but through initially finding the profit before tax abd adding back the figures as given in qstn then later deducting tax.will that give the score or it has to be done as they did in the answer
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