Registered Posts: 8 Regular contributor ⭐ ? ⭐
Hi,

I have unit 6 simulation to do tomorrow.

I have got myself in a mess over the prastice one on the AAT website.

I have worked out the answer up till the year 2006, cant remeber what to do for year 2007.

Anj.

• Registered Posts: 95 ? ? ?
Hello

Do you mean you are actually doing your CBE online Exam tomorrow or is it jsut the simulation for costing you are doing????

what paper are you looking at????

Shell
• Registered, Moderator Posts: 2,034
Use the working paper on page 21 of the answer booklet to calculate the payback period
and the net present value of the decision to purchase the delivery vehicle. Ignore inflation
and perform all monetary calculations to the nearest £

The managers of the mail order division are considering the purchase and operation of their
own delivery vehicle at the end of this year.
As a result they forecast annual cash savings of £5,400 from 2004 onwards, after taking
account of the vehicle operating costs.
The vehicle will cost £12,000 and will have a resale value of £1,500 when it is sold at the end
of 2007.
Please prepare an appraisal of this proposal from a financial viewpoint.
Calculate the payback period and the net present value at our usual discount rate of 10%. Our maximum required payback period for all capital projects is three years.
Sandy
[email protected]
www.sandyhood.com
• Registered, Moderator Posts: 2,034
In 2007
forecast annual cash savings of £5,400
a resale value of £1,500

So the net cash flow is £6,900 for 2007

In the payback, I think we have paid back before 2007 so it is not affected
In the NPV, calculate the discounted cash flow (Present Value) for 2007 using the £6,900 cash flow.
Sandy
[email protected]
www.sandyhood.com
• Registered Posts: 8 Regular contributor ⭐ ? ⭐
Hi Guys,

Thank you very much for your help.

I walked away from it, went back and managed to work it out )

Think the stress of tomorrow is getting to me.
• Registered Posts: 108 ? ? ?
good luck for tomorrow!