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hello sir
i have a question about this
in the lecture of chapter 8, example 4 , when you calculated the tax saving, you used this approachcost 10000 tax saving
1st year 25% (2500) *30% 750
7500
2nd year 25% (1875) *30% 563
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but in the bpp , there is a question saying that “the initial invetment is 5000, tax allowable depreciation is 25%,tax rate is 28%” and it calculates the tax saving like:tax allowance tax saving
1st year 5000*0.25=1250 1250*0.28=350
2nd year 1250*0.75=937.5 937.5*0.28=262.5why the answer doesn’t like yours
In future, if you want me to answer then you must ask in the Ask the Tutor Forum – this forum is for students to help each other 🙂
Have you not watched the lectures? I work through all the examples in the lecture notes and explain what is happening and why.
Obviously if the tax rate is different then the calculation of the tax saving is different!!! Also, the timing of the saving depends on what the question states about the timing of the tax.
There is no point at all in using our lecture notes without watching the free lectures that go with them. It is in the lectures that I explain and expand on the lecture notes.
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