So what's the net cash inflow finally..40000 - 7500 - 12000 right ? coming out to be 20500 per year right ?
Costing Paper Quest 7(b) Wrong
Page no : 2
mukesh soni
(CA)
(26 Points)
Replied 13 November 2009
no its 20875 cash inflow after tax n saving of 12000 after tax, so it comes at 32875
Dhruv
(Chartered Accountant)
(308 Points)
Replied 13 November 2009
no wait..the incremental revenues are 40000..and the incremental costs are 7500, and the loss due to commission is 12000 so that gets subtracted ...it comes out to be 20500
Dhruv
(Chartered Accountant)
(308 Points)
Replied 13 November 2009
and it's earning 12000 ...before..when it outsources the work..when it acquires the machine..there's a loss of 12000 since it won't be earning that..so 12000 will get subtracted..not added..
Dhruv
(Chartered Accountant)
(308 Points)
Replied 13 November 2009
And you can't assume a tax rate, because it says 'net of taxes', which implies that tax has been adjusted from everything and what is left are the real cash flows which need to be calculated
Amit Mahajan
(Chartered Accountant)
(138 Points)
Replied 13 November 2009
yes totally agrree...no tax rate to b assumed...
NITESH AGARWAL
(C.A FINAL )
(112 Points)
Replied 13 November 2009
due to shortage of time i have prepred income statement of two companies in following format-----
particulars company a company b
sales - -
- v/c - -
contribution - -
and so on is this is right or i have to make income statement of both the companies individually
sumit
(CHARTERED ACCOUNTANT)
(479 Points)
Replied 13 November 2009
please tell me how much was weightage of or in new course costing paper??????????
sumit
(CHARTERED ACCOUNTANT)
(479 Points)
Replied 13 November 2009
please tell me how much was weightage of or in new course costing paper??????????
Kritesh Tiwari
(CFP)
(109 Points)
Replied 15 November 2009
As there in question .... there r two possibilities.....
first .....to earn commission.... & second... Purchase of the m/c
so we had to compare these.. possibilities....
No tax percentage will be assumed...
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