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Question 150 BPP Revision Kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Question 150 BPP Revision Kit

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • August 26, 2020 at 2:59 am #582015
    thuyly134
    Member
    • Topics: 16
    • Replies: 13
    • ☆

    Dear John,
    Please help me how we calculate this Q in detail.
    Selling price is inflated at 3%
    so sales figure Year 2 = Sales at Year 1 * 103% = 0.7 million * 103% = $721,000
    Sales figure Year 3 = Sales at Year 2 * 103% = $721,000 * 103% = $742,630
    I don’t understand the answer at the Revision Kit, Please advise
    Thank you so much!!!

    August 26, 2020 at 9:29 am #582054
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    The question asks for the sales revenue at time 2, not at time 3.

    The sales units at time 2 are 1.6 million from the question.

    What are you inflating the demand? It is the selling price that inflates, not the demand.

    The selling price at time 2 will be $5 x 1.03^2

    Therefore the sales will be 1.6M x $5 x 1.03^2

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