[anumohan]

found the answer!

thanks

[anumohan]

Ah sorry just seen that its only applicable for Distantland and Division A doesnt operate there. Really need to read the questions more carefully!

Thanks for your help!

[anumohan]

Is there a reason why haven’t they included the tax @ 20% when they calculated the revenue from selling it externally by Division A? Is it because it will be taxed twice? They are only calculating it for purchases by Division B which is why I was confused what it meant.

Thanks

[anumohan]

Ah ok makes sense now. Thank you so much for getting back 🙂

[anumohan]

Also, under adjusted cost of capital, how is goodwill calculated under x7 as $50 million and they didn’t include economic depreciation in the answer. I dont get this? EVA is so complicated! Just when I thought I finally got it, they’re confusing me again! 🙁

Thanks again
Anu

[anumohan]

i dont think it states it in particular in IAS39 but it makes sense as raw materials are affecting the cash flow – i know there is an instant pair/ match off in FV hedge (loss on risk is matched with gain on the derivative) and this is not the case in cash flow hedge as there is no match in the current period. CF Hedge covers the risk of changes in cash flow while FV Hedge covers the risk in changes in asset/liab – i saw this question Artwright from Dec-04 that covers this topic 🙂

[anumohan]

amazing! thank you so much for clarifying 🙂

[anumohan]

no worries i have figured it out! 🙂

[anumohan]

hi joana0111 how did you achieve the £85k?

thanks

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