Osborne Books - Level 4 synoptic workbook, page 29, task 4
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candybr2017
Registered Posts: 2
Hello, can anyone please explain the calcluation for task 4 in Level 4 synoptic workbook, page 29?
i don't understand why the cash flow amount has to minus 60K. The answer shows in the book for the cash flow in Y1 is (275k+50k-60k)=265K
![](https://us.v-cdn.net/5021951/uploads/editor/by/ojfwc7yeqjzz.jpg)
I have attached the quesiton.
Thanks
Haili
i don't understand why the cash flow amount has to minus 60K. The answer shows in the book for the cash flow in Y1 is (275k+50k-60k)=265K
![](https://us.v-cdn.net/5021951/uploads/editor/by/ojfwc7yeqjzz.jpg)
I have attached the quesiton.
Thanks
Haili
1
Comments
-
It's beacuse the £60,000 is overall irrelevant to the decision and is therefore not included in the considered cash flow.
If the plant is open:
£275,000 is made including £50,000 in management cost
If the plant is closed
The management cost still occurs and £60,000 is gained at another site.
Therefore cash flow
=£275,000 (made from being open) + £50,000 (cost occurs either way) - £60,000 (Income that would occur even if closed)AAT Level 4, MAAT
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Hello, could anyone explain whether the 10% decrease is calculated from 265K or from 325k?
Photo of the answer highly appreciated. Thank you0 -
Thank you so much for sharing. It's very helpful for me.0
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> @KasiaK said:
> Hello, could anyone explain whether the 10% decrease is calculated from 265K or from 325k?
> Photo of the answer highly appreciated. Thank you
Hi Kasiak, I have been struggling with this question and previous comments have been helpful.
The 10% is on the 265,000. It wouldn't be on the 325,000 because this amount is before the deduction for non-relevant costs of 60,000.
The way I handled it is by carrying over only 90% of each year's revenue to next year. E.g.
Y2 total = 265,000*90%=238,500
Y3 total = 238,500*90%=214,650
Etc...
This is also what the answer suggests.
I hope this is somehow helpful.0 -
Oniyama100,
Perfect! Very helpful indeed! Many thanks for your prompt response.
Kasia1 -
Great, thanks! Thank you very much for the explanation and solution to the problem that you provided. I could not cope with this task for several days and your answers helped me a lot. In general, when I cannot cope with a particular task at the university for a long time, I turn with advice either to the teachers or to the company https://assignmentbro.com/ca/, which has been helping me with writing assignments for several years.-1
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