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Q31a iii b – Paper Specimen 2016 (typo in suggested answer?)

Forums › ACCA Forums › ACCA FM Financial Management Forums › Q31a iii b – Paper Specimen 2016 (typo in suggested answer?)

  • This topic has 1 reply, 1 voice, and was last updated 7 years ago by imwarren.
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  • June 26, 2018 at 3:09 pm #460189
    imwarren
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    • Topics: 1
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    Calculation of return on capital employed
    Total cash inflow = 560,000 + 696,028 + 1,350,773 + 392,874 = $2,999,675

    —————————————————————————

    How was the annual cashflow calculated?
    i managed to work out that the cashflow in the first year is ($20*103%-$8*104%)*60,000units-$17,000*104% = $560,000

    but i am unable to work out the rest.

    I suspect there is a typo, but then this exact questions was also present in Q4a iii – Paper Specimen 2014, and Q2b iii c – June 2009. *very confused*

    June 26, 2018 at 3:39 pm #460190
    imwarren
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    ok, nvm… found the problem after reading through the entire solution in depth.

    It has to do with rounding errors if one adjust the inflated price to 2 decimal place

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