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Dear tutor ,
Could you kindly help me understand the calculation of this qn on how together the fair value ( I know we have to consider physical change of the cows as well as the increase of fair value ) , tried my approach but was not getting the answer .
Kindly help me outHi,
Where can I find the question? If you let me know then I’ll answer it for you.
Thanks
It is an amended question in the BPP revision kit .it is question 73 (ACR, 6/02).
Hi,
If you look at the cows, they are two years old at the start of the year and therefore three years old at the end of the year.
The price change is the change in price of a two year old cow, so it was $50 at the start and $55 at the end of the year.
The physical change is the change in the price of the two year old cow at year end to that of a three year old cow at the same year end date, as the cow has physically grown by one year. At the end of the year a two year old is $55 (as above) and three year old is $60.
The same then applies for the Heifers, they were one year old when purchased and are now one and a half at the year end.
If you show me your calculations then I can show you where you’ve gone wrong, unless the explanation above has solved your issue.
Thanks
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