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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.I 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.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)The 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.
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