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Method to compute EAC
AFM
answered on 16-Oct-25 16:56
Sir, can we also compute EAC as how you have done in Ill 34? I worked out like that and found at the end of year 1 EAC is Rs.58506 at y2 is rs.57065 and at y3 is rs.57970. By doing that method as well the EAC is less at the end of y2 only. Is it correct method to follow in this question?
latest answer
In these ACBD questions they have done using two methods. Some question by method 1 and some questions by method 2 Ideally both should give same final result in terms of decision, but from computation perspective they both are giving slightly diff answers. Some amount of variance could be due to rounding off issues. Ideally should not be an issue but we dnot know what exam key will have in terms of working. That is the only worry
Pradeepa Narayanan
CA Final
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285
Advanced Capital Budgeting - Illu : 25
AFM
answered on 14-Oct-25 17:43
Sir , In the annual fixed cost , why in the equation is it equal to Rs.29,727.50 , instead of Rs.0 , as if the Annual fixed cost increased by 7.8416% the NPV is zero ?
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Thank you Sir
Prethivi Rajan
CA Final
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211
interest rate risk management, forward rate agreement formulae
AFM
answered on 14-Oct-25 13:59
sir the numerator in the formulae looks logical since it is pure gain by the forward rate borrower, but why there is a denominator 1+RR(dtm/dy) why they are doing this in the illustration 1 sum, the answer for the numerator coming for me is 4.5lakhs as the gain, but due to the denominator in the formulae it is reducing to 4.39 lakhs, is there any logic behind the formulae [Video Time Stamp: 07:45]
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Fra
Raghavan Mani
CA Final
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185
hillers model formulae
AFM
answered on 13-Oct-25 19:34
Sir in hillers model formulae why are we squaring the denominator in 2, 4 ,6 in the sum no illustration 14 while calulating standard deviation [Video Time Stamp: 20:00]
latest answer
I am not aware of the logic I don’t even know where they picked up this concept from I have searched at multiple places and in various books but could not find the source for hillers method I mentioned abt this in the videos too
Raghavan Mani
CA Final
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253
Query
AFM
answered on 13-Oct-25 20:31
Sir , in this qn it is saying that XYZ inc issues a loan right? So it means they are the lender .so typically they should buy a floor and sell a cap , right? [Video Time Stamp: 00:19]
latest answer
The wording is poor Issues a loan means issues a bond. i.e they are borrowing Also, only if you are borrowing would you be interested in restricting your outflow due to increase in interest rates So You woudl enter into a buy cap only if you issue a bond i.e take a loan
Sahal Shalu
CA Final
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153
capital budgeting
AFM
answered on 12-Oct-25 10:30
sir, in the concept of capital budgeting why we assume that the depreciation is not affected by inflation, why in the formulae we reduce the depreciation first and calculate the tax then we add back the depreciation [Video Time Stamp: 03:36]
latest answer
Because there is a tax benefit on account of depreciation so we have deduct it as part of CFAT working Then we add back as it is a non cash item
Raghavan Mani
CA Final
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207
May 2025-advanced capital budgeting
AFM
answered on 15-Oct-25 11:49
Sir, in this question what is ready and understood was everything shall be calculated in real terms but in suggested solution they have calculated in nominal terms. What shall we do in such exam in exam hall.
latest answer
Obviously we can’t predict the suggested answer It was a bad question to be asked in exam Even when i solved it immediately after exam I too was unsure of what the answer could be as there are way too many assumptions My answer was wrt to context that If we get a question like this how you should answer because we have seen how ICAI is thinking abt this kind of questions
Hrishikesh Pradhan
Qualified CA
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250
Number of Future Contracts to be Shorted
AFM
answered on 10-Oct-25 21:45
Sir in the iv Part of the Question, they asked the number of future contracts the investor should trade when Beta was 0.6. I have done it as follows, Number of Contracts = 1,88,54,860(Portfolio Value)*0.6(new Beta) divided by 11,98,856(Value of Index)= 9.43. Is it right Sir? And also to get the Number of futures to be shorted, i have done 13.35-9.43= 3.91. [Video Time Stamp: 16:36]
latest answer
yes but slightly convoluted, pls look at sugg answers too. they want u to adopt a methodology that they prescribe
Murali Thripuraboina
CA Final
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175
RELATING TO LECTURE
AFM
answered on 08-Oct-25 18:08
SIR BOX WALA JISME LIKHA HUA HOTA HAI VIDEO MEI KYA USKO NOTEDOWN KARNA HAI YA BOOK MEI AVAILABLE HAI ? [Video Time Stamp: 11:18]
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Exam relevant content book main available hain
Abhay Goyal
CA Foundation
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177
Advanced Capital Budgeting - Illu : 14
AFM
answered on 08-Oct-25 08:09
Sir, while calculating standard deviation of the expected value, why the discounting rate had a power of year multiple by the 2?
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Thank you Sir
Prethivi Rajan
CA Final
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232