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Economics
CFA
answered on 14-Feb-25 17:39
If FIIs sell indian equities in large quantities they will usually convert the amount into USD right which will strengthen usd and depreciate Rupee which inturn increases gold price atleast in india Is this right?is this how gold price changes due to changes in market?
latest answer
That applies to all imports not just gold
Dhakshana Dhakshana
CFA L2
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3
155
Derivatives
AFM
answered on 14-Feb-25 13:42
Hi Sir, Why would we buy the back futures that is already sold. In the above question, My understanding is: The rice trader wants to sell after 3 months and he expects a decline in price from spot of 60 upto 56.So, he should Short a future today @Rs 59 per kg. After 3 months, when the price falls to 57, he can purchase from the spot market and deliver it to the buyer. In this way, he can gain Rs and ultimate realisation will be Rs 59* 22000. But in the solution it is given that, the seller shall buy back the futures sold on Day 0 at 3 month Future rate after end of 3 months( 58).-Please help me understand this. And , why should he sell at 3 months Future price (58) after the end of 3 months.- My understanding is he should sell at 3 months Future price agreed on day 0 (59). Please help me understand, Sir
latest answer
All derivatives are not delivery based. Forwards are delivery based. Futures are not So, in case of futures, it is only net cash settlement. So, you have to square off the position on due date and enter into a separate cash transaction
ahmad bunyamin
CA Final
★ 1K+
1
172
How did we get 5% for ineligible credit for personal expenditure? Please explain
Indirect Taxation
answered on 14-Feb-25 21:44
How did we get 5% for ineligible credit for personal expenditure? Please explain
latest answer
It is assumption by the law that 5% of common credit is to be reversed and it is treated as personal purpose. However, while solving questions we do not consider this unless question specifies that the goods or service are used for personal purposes also.
Manu Jacob
CA Final
★ 6K+
1
169
If gift is given as part of employment contract is ITC available?
Indirect Taxation
answered on 14-Feb-25 21:45
If gift is given as part of employment contract is ITC available? In the example if IPAD is given as contract with employee can ITC be claimed?
latest answer
If it is business purpose then Yes.
Manu Jacob
CA Final
★ 6K+
1
202
Advanced Capital Budgeting
AFM
answered on 14-Feb-25 10:23
Hi Sir Regarding Optimal Replacement decisions, Why don't we consider Present value of Purchase cost of Machine when machines are to be replaced after 1 year/2 years? But on the other hand, we consider present values of repairs and salvage value which are to be spent/ received after 1 year or 2 years.
latest answer
Instead of computing 4 year cycle in which you replace a machine 2 to 4 times , it is easier to compute EAC and compare. You please do try and solve the Q with a 12 year cycle in which in case a machine is replaced 12 times, in case 2, 6 times ( after every 2 years) , case 3 after every 3 years i.e 4 times and case 4, 3 times , i.e after every 4 years. Please see overall cashflows in all 4 scenarios and then evaluate the decision - you will get same answer of when to replace. But Pls note the 12-year cycle is far longer cycle and difficult to compute In this 12 year CF you can take PV of replacement cost and Maintenance costs
ahmad bunyamin
CA Final
★ 1K+
1
192
Illustration 37 - security valuation - equity
AFM
answered on 14-Feb-25 10:16
Instead of this method, can we find the value of long term borrowing as : (Capex- depreciation)* Debt ratio + Change in WC*Debt ratio and follow the formula as usual? This also gives the same answer. Is this approach correct?
latest answer
Yes, You can do that. I explained the logic in one of the questions too
Ali S
CA Final
★ 8K+
1
216
Place of supply
Indirect Taxation
answered on 14-Feb-25 21:46
As per sec 12(11) telecommunication services... For pre paid mobile connection the POS if it is supplied to the selling agent, reseller distributor... Is the address of the selling agent. And if the prepaid services payment made through internet banking / electronic mode is location of the recipient... Can anyone explain clearly? And what if services are provided by the agent but the payment is done through electronic mode what is the POS here ?
latest answer
If payment is made through online then POS will be address of recipient only. If recharge is done through selling agent and payment is made to selling agent then POS would be address of selling agent.
Jashvanth.K
CA Inter
★ 11K+
1
210
Regarding eps
Accountancy
answered on 18-Feb-25 14:33
Sir in icai study material comprehensive question 9 chapter eps during calculation of eps we should take bonus share as 5lakhs ×12/12 as there is no increase in resource or further issue before issue of bonus
latest answer
Yes
Surya Kiranmayee
CMA Inter
★ 0
4
254
Illustration 33 - security valuation of equity
AFM
answered on 14-Feb-25 10:14
While finding shareholder's wealth can't we take 1060 (i.e without adding subscription amount of 150) as pre-rights issue wealth and 1230-150=1080 as post right's issue price, as we did in other problems?
latest answer
this question is different because in this Q, there is a project, whose investment & NPV values are available and benefit of the project has to be added to shareholder wealth
Ali S
CA Final
★ 8K+
2
219
In the question, since it is elder brother in the question, should we consider it as exempt and taxable value is 0?
Indirect Taxation
answered on 14-Feb-25 21:47
In the question, since it is elder brother in the question, should we consider it as exempt and taxable value is 0?
latest answer
Brother is related person only if he is dependent wholly or mainly.
Manu Jacob
CA Final
★ 6K+
1
181