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Nominal cash flow
AFM
answered 20 hrs ago
Sir, while calculating nominal cash flows, whether inflation adjustment should me made to depreciation. Because in some problems inflation adj. is made to depreciation and in some they didn't. For eg. In illustration 1 from ICAI, they did the inflation adj. for dep. whereas in Illustration 2 they didn't. Can you explain the reason sir
latest answer
Inflation does not affect depreciation as it is computed on historical cost basis ICAI I’ll 1 and 2 are there to show that impact. Best way to understand this is go to last two questions where I discuss this clearly in a question they asked in 2024/2025
Nitin Raj
CA Final
★ 270
1
12
Doubt
AFM
answered 23 hrs ago
Here they mentioned debt as long term debt why are we not considering the interest on the same [Video Time Stamp: 09:26]
latest answer
Interest
pavan kumar
CA Final
★ 3K+
1
8
Doubt
AFM
answered 1 day ago
Here retention ratio is not given for proposal 2 then why are we taking 94.28% as retention ratio. [Video Time Stamp: 15:13]
latest answer
Q has blank data. Question does not say zero
pavan kumar
CA Final
★ 3K+
3
16
Direct or Indirect quote
AFM
answered 1 day ago
Sir, for may 26, in Q.no. 1 - Indirect quote is mentioned as VL/INR, whereas in Q.no.3, direct quote is mentioned as USD/INR. By seeing USD/INR, I can identify whether it is direct quote or not. How can I identity for VL/INR
latest answer
Valid Question - BUT ICAI is like that only. No conssitency One way to figure this would be Indian company is investing in a small country . SO INR will be stronger so 1 INR = 50 VL
Nitin Raj
CA Final
★ 270
1
16
Illustration #22
AFM
answered 1 day ago
Sir, in the fourth sub-question, they specified that the dividend is received after 2 months and the option matures after 3 months? If so, why have we considered the time period in years while calculating the Black-Scholes Model? Shouldn't we convert the respective periods into years based on the timing of the dividend and option maturity? [Video Time Stamp: 29:29]
latest answer
We computed pv of dividend and adjusted in spot The adjustment happened in years only right ?
Pavan Naidu ca
CA Final
★ 320
1
12
Illustration #15
AFM
answered 1 day ago
Sir, at the expiration date, in the case of a Sell - Call, can we say that the net cash outflow will be ₹5 (₹65 − ₹60), since he is receiving ₹60 from the other party? Is this interpretation correct, sir?
latest answer
Outflow 65 and inflow 60 net outflow 5 but on a profit basis you have to adjust premium too
Pavan Naidu ca
CA Final
★ 320
1
12
Bond refund
AFM
answered 2 days ago
Why Kd is used to discount Incremental cash inflows?
latest answer
because that is the cost of money at that time - if not this what else would you assume?
Hiren Ghadiya
CA Final
★ 1K+
1
21
Illustration 26
AFM
answered on 04-Oct-26 19:34
Sir we have exactly similar question in illustration 8. There you have said that % change is irrelevant for this type of question. But why in this sum we are considering the changed portfolio value which we did not do in illustration 8
latest answer
Pls show value of portfolio after change and compute
Balavignesh
CA Final
★ 985
3
21
Q
AFM
answered on 03-Oct-26 19:57
Sir, i don't understand why Ram cant buy the put at strike price of 970(net of 20 Rs. Premium) comes upto exactly 950.So 95% of the share is perfectly hedged right?
latest answer
It is an ICAI solution - even I agree with your broad logic but the assumption & computation here is without considering the premia cost
SANSKRITI BADRI 2111339
CA Final
★ 4K+
1
12
Security Valuation | FCFE
AFM
answered on 03-Oct-26 19:53
Hi sir 1. In the FCFE-to-Market Cap route, is the cash figure net of debt? or just the gross value? 2. Regarding Minority Interest, it has to be adjusted in the FCFE figure itself, right? [Video Time Stamp: 18:50]
latest answer
1. Cash is always net of debt 2. yes. MI is already deducted from net profit when we compute FCFE
Vishnu Muraleedharan
CA Final
★ 32K+
1
16