pev - discounted cash flow dec 2008 and june 2009 papers
iss072
Registered Posts: 12 New contributor 🐸
Please can some one help me with this..
I don't remember studying this so I am trying to remember a way of doing this for the exam but I am getting confused
June 2009 exam
question 2.3
(a) asks you to calculate the discounted cash flow of a new machine plus ruinning costs spread from (0 - 5 years)
This seems quite striaght foward as the discount is worked out from 0-5 over the years minus the residul value
but....(b)
asks you to calculate the leasing costs - this is only discounted from (0-4) -WHY?
Dec 2008 -
Task 2.3
(a) seems straightfoward as above new machine and running costs over 5 years - discounted from year 0-5 BUT...
(b) asks you to calculate the labour saving - this answer misses out year 0 - WHY? but then calculates the saving over year 1 -5??
Thanks in advance if any one can shed some light on this
I don't remember studying this so I am trying to remember a way of doing this for the exam but I am getting confused
June 2009 exam
question 2.3
(a) asks you to calculate the discounted cash flow of a new machine plus ruinning costs spread from (0 - 5 years)
This seems quite striaght foward as the discount is worked out from 0-5 over the years minus the residul value
but....(b)
asks you to calculate the leasing costs - this is only discounted from (0-4) -WHY?
Dec 2008 -
Task 2.3
(a) seems straightfoward as above new machine and running costs over 5 years - discounted from year 0-5 BUT...
(b) asks you to calculate the labour saving - this answer misses out year 0 - WHY? but then calculates the saving over year 1 -5??
Thanks in advance if any one can shed some light on this
0
Comments
-
Hi
This is because b is paid in annually in advance therefore would only be over the 4 years.0 -
Hi for Dec 2008, labour saving starts year one. It means that u can't start saving the same year of purchase u at least need a year to run the machine to start saving.0
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thanks -0
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