BPP Black Friday sale! (28 Nov-1 Dec)

40% discount on all BPP books specially for OpenTuition students!
Get it here >>

sept/ dec 2019 Okan co

This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
June 2, 2021 at 2:43 pm #622782
yuk123
Member
- Topics: 1
- Replies: 1
I am not able to understand why in the module answer they have not considered the tax relief lost for the APV adjustment ?? there is a tax lost by borrowing at 2.1% rather than 5% why the examiner has not considered this in the sample answer?
June 2, 2021 at 4:24 pm #622809
John Moffat
Keymaster
- Topics: 57
- Replies: 54789
He has brought it into the answer.
The subsidy benefit is 5 – 2.1 = 2.9% and he has then multiplied this by the loan amount and by 80%. The 80% is to account for the fact that they are not saving tax of 20% on the subsidy.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.