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IFM - Illustration 18
AFM
answered on 29-Jan-25 20:47
In this question, we have included the cost of debt for computation of WACC but we are assuming that loan is taken by Vishwas and not the company. Isn't it logical to assume that the company has paid the interest instead of Mr. Vishwas?
latest answer
Ok sir
Vigneshwar M
CA Final
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226
IFM - Illustration 17
AFM
answered on 29-Jan-25 19:12
Sir, in this question the minimum amount the company should charge from the prospective buyer is USD 4.7427 Million (i.e., the cost & taxes paid in India assuming that no credit of Indian taxes is available in the US). Am I right sir?
latest answer
Thank you sir
Vigneshwar M
CA Final
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189
Doubt
Accountancy
answered on 28-Jan-25 14:20
Please explain how to solve this
latest answer
You can ask questions specific to CA/CMA
Shridhara H U
CA Inter
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268
Value of project + abandonment option
AFM
answered on 28-Jan-25 07:18
Sir in Iluustration 26, value of project + abandonment calulated as (PV of Inflows - Investment + value of abandonment) But in this question value of project considered as Investment (Investment + value of abandonment)
latest answer
Good point If u read the questions you will notice a diff In q 26 they are asking whether we should invest or not so NPV is the relevant metric In this Q value of option and value of project with option refer to overall value of the project and not the NPV
Hemachandra D
CA Final
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327
if 2 tree probaility ?
AFM
answered on 28-Jan-25 07:19
Sir if in this question if its 2 tree/ 2 years data given, then binomial method using the probabiilty right ?
latest answer
Yes
Hemachandra D
CA Final
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186
Exemption
Indirect Taxation
answered on 31-Jan-25 10:25
How is the transportation service provided by the college through the travels exempted?
latest answer
Transportation service provided by educational institutions to students, faculty and staff is exempt.
kathiresh V
CA Final
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250
Point 4- SD classified as current
Financial Reporting
answered on 27-Jan-25 19:35
Hi Sir, It's been specified that if the contract is cancelled before the completion, then it becomes payable immediately, however company does not expect the cancellation of contract, nowhere it is mentioned that who is eligible for contract cancellation & even the company does not expect to cancel the contract, then why it is classified as current. pls clarify
latest answer
Security deposits are given by other parties. This acts as a protection for the company. The question is not clear about who can cancel hence we can assume either party can cancel
priyadharshini priya
CA Final
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209
put period is 5 years
AFM
answered on 27-Jan-25 15:46
Sir Airbus can sell the business within next 5 years, so value of option should be based on t = 5 or becasue cashflows given for 30 years so using t = 30
latest answer
5 years - option can be exercised in 5 years
Hemachandra D
CA Final
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209
16.7 PV or NPV and what does answer 4.6192 means
AFM
answered on 27-Jan-25 15:22
Sir whether the given 16.7 million is PV of Cash Inflows or is that the NPV if thats PV of Cash flows 16.7, then NPV is 4.2 (16.7-12.5 ), we calulated value of option as 4.6192 So how does this Normal way NPV 4.2 vs compared with 4.6192 value of option the value of option we got greator is it because we have option to excercies any time in 15 years ?
latest answer
16.7 is PV Your understanding is right. Value of option at 4.6 is > NPV which is 4.2 imagine You have a buy call at 60 as strike and CMP is 57, value of option is intrinsic value + time value. Option value will not be just 3 It may 4 or 5 to account for time value Same logic apples here
Hemachandra D
CA Final
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204
Type of Option ?
AFM
answered on 27-Jan-25 15:13
Sir is this American Call Option kind ? as it can be excericesed anytime within 15 years
latest answer
Yes, but is not possible to value an AMerican call using BSM An American call is atleast most valuable than European. So at minimum value of european will be value of an american call
Hemachandra D
CA Final
★ 9K+
1
199