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BPP revision kit question 162 pg 55
so the question clearly mentions
“A balancing charge or allowance can be claimed at the end of the fourth year”so i took it on the 4th year while calculating NPV but the BPP answer took it on the 5th year so its really confusing me.
The balancing charge/allowance is claimed at the end of the 4th year, but because the question says that tax is payable one year in arrears then the tax effect will occur one year later.
I do suggest that you watch my free lectures on investment appraisal with tax, where I explain all of this. The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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