For part a) of this question, should the value of capital expenditure be adjusted for 6% inflation as in the case of salaries and repairs and maintenance. If not then why not
Although the initial budget inflated the capital expenditure by 6%, note 3 of the question stated what the actual expenditure is going to be.
According to note 2 of the question, the salaries will be increased by 2% on 1 December, which is 6 months through the accounting period. Therefore for half the year they will stay at the same rate as for y/e 31 May 2013m and for the other half of the year they will be 2% higher.