Dear Sir,
In Appendix 1 of the answer, Remittance flows in Calculation I could not grasp it. Could you plz help me with little explanation? After such a long time, I entered in the site for P4 help and I must admit that this particular paper is more resourceful than any time before. Thanks a lot to the people working behind this from one of the students of developing world where we don’t get any quality tuition provider.
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Yilandwe-June,2015
10y ago#1I am not sure which part of the answer you are not clear about.
You calculate the cash flows in YR in the normal way, and then convert to $'s using the forecast exchange rates given in the question.
Thanks a lot, I got it
10y ago#3You are welcome :-)
hello ,can you please explain how they arrived at the figures for contribution of part sales and tax on contribution and royalty.How didi they get $120? sample answer is below
Contribution
(parts sales) ($120 +
inflation per unit) 18,540 61,108 95,723 48,622
Royalty (w3) 36,000 36,000 36,000 36,000
Tax on contribution and royalty (20%) (10,908) (19,422) (26,345) (16,924)
10y ago#5The question says that currently they earn a contribution of $40 on a price of $200. So the cost to Imoni is $160.
It also says that they can increase the transfer price to $280, so the contribution will be 280 - 160 = $120.
thank you so much for giving such prompt and clear answers and giving amazing lectures on open tuition.
10y ago#7You are welcome, and thank you for your comment.
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