Sir,
I need ur a lil bit help in the working of working capital.
I am not getting y they did not rounded it off in yr 1 nd yr 2 while they did so in yr 3&4.
If I am not wrong the working goes on in this way:
$150,000*5%+ =157,500
that shows an increment of $7,500.
Thank you
Ask the Tutor ACCA FM
Sep/Dec 2015 Q#5
8y ago#1The rate of inflation is not 5% - it is 4.7%.
So at time 1, the incremental WC is 150 x 4.7% = 7.050. The examiner has rounded to the nearest thousand which is normal.
At time 2, it should be 157 x 4.7% = 7.379. Again he has rounded to the nearest thousand.
Can u plz make it easy for me this line what does that mean??
This investment in working capital is expected to increase in nominal terms in line with the general rate of inflation.
Thank you
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