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Dear John,
In an International APV question that appeared in a Kaplan mock, bid and offer rates were both given.
I used the bid and offer rate depending on what transaction was happening at the moment and which part of the NPV I was doing. For example, if I was in the foreign aspect of the NPV, I would use bid or offer rates depending on the perspective of the foreign project’s cash flow.
However, the suggested answer used mid-rates. Will I get marks in this case?
If it is necessary for arriving at the cash flows you should not normally use the mid-rates.
However it depends really on the wording for the question. I do not have the Kaplan mock, but it might be a past exam question (and I have all past exam questions). If you tell me the name of the question then I will check.
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