AAT Advanced Synoptic practice assessment 2  Task 5.b (Sept 2021 version)
irimescu_cris
Registered Posts: 3
Hello
I am struggling with AAT Advanced Synoptic practice assessment 2  Task 5.b (Sept 2021 version)
Can anyone help me with the calculations for Net Cash Flow?
The answer is
114090
111750
132360
Thank you
I am struggling with AAT Advanced Synoptic practice assessment 2  Task 5.b (Sept 2021 version)
Can anyone help me with the calculations for Net Cash Flow?
The answer is
114090
111750
132360
Thank you
0
Comments

Hi,
I stuggled with this question aswell.
Year 1  64,000 + 50,090 = 114,090 * 0.893 = 101,882 (rounded)
Year 2  63,400 + 48,350 = 111,750 * 0.797 = 89,065 (rounded)
Year 3  65,800 + 36,560 + 30,000(scrap value) = 132,360 * 0.712 = 94,240 (rounded)
Net Present Value is then = 165,000 + 101,882 + 89,065 + 132,360 = 120,1870 
Sorry the last line I accidently included the wrong figure. I have corrected it below:
Net Present Value is then = 165,000 + 101,882 + 89,065 +94,240= 120,1870 
Thank you very much!0

Momena has the correct values but I just want to add the reason behind it.
Cash flows are only looking at the actual cash transfers.
When you have depreciation there is no cash changing hands as such you need to add back the depreciation that has been taken to make the P&L.
This would also apply to sales of fixed assets, in the P&L you'll show the overall profit/loss not the cash flow. You would remove the profit/loss from selling the asset and add in the actual sale amount of the asset.
Hopefully this will help with similar questions in the future.AAT Level 4, MAAT
ACCA in progress
F4 Passed Aug 2020
F5 Passed Dec 2020
F6 Passed Sep 2020
F7 Passed June 2021
F8  Planned Sep 2021
F9  Passed June 20210 
Thankyou Pian, for the reason. I was abit confused to why it was but I figured it out in the end.0

Thank you0