Forums
Back
International Financial Management
AFM
Hello Sir, In this problem, What does "The company would apportion existing overheads to the tune of NPR 5 crores to the park" mean? And how to adjust the same? Also, Do we not have to add the Interest on Loan to the cost as we know the loan amount and %also? Video Details ------------- Advanced Financial Management - AFM International Financial Management #9. Illustration # 2 Investment in Nepal
Answers (2)
Best Answer
We are finding out EV using FCFF - so int cost etc do not matter - also we are comparing overall project NPV with overall project investment Int cost is given at 9% - we are not considering it we are computing project EV On 5 Cr apportioned costs - these are not new cash costs incurred for the project - hence all such costs are ignored for purpose of evaluating projects
Your Reply