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Tramont Inflation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Tramont Inflation

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 29, 2015 at 8:22 am #286069
    gulam007
    Member
    • Topics: 31
    • Replies: 47
    • ☆☆

    hi sir
    Relating to the question above, why does inflation start in year 2 for the cost? in what cases do we start inflating from year 1. Ive been quite confused on this

    Thanks in advance

    November 29, 2015 at 8:31 am #286074
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51571
    • ☆☆☆☆☆

    The question says “The following revenues and costs apply to the first year of operation”.
    Because of this, they are the actual flows in the first year and only inflate in later years.

    If the question had said that the flows were at “current costs” then the inflation would have occurred in the first year as well.

    November 29, 2015 at 8:35 am #286075
    gulam007
    Member
    • Topics: 31
    • Replies: 47
    • ☆☆

    Thanks alot, Ive noted that one

    November 29, 2015 at 11:48 am #286113
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51571
    • ☆☆☆☆☆

    You are welcome 🙂

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