Mock test series 1

Are referring to Q 2 (a) on page 4?

Sriram Somayajula

Admin

10-May-24 12:00

Yes sir this is the sum

Thread Starter

Abi KVA

CA Inter

★ 2K+

10-May-24 16:09

We can compute the solution as per the method which we had been following since beginning I.e., after arriving at Inc CFBDT as 74 Cr, use the table. Year Inc. CFBDT Inc. Dep Inc. PBT Inc. PAT 1. 74. 25 2. 74. 18.75 3. 74 14.05 4. 74 5. 74 & Finally Inc. CFAT of each year, multiplied with PVIF of each year to arrive at PV of Inc CFAT & then compute PV of TCI using (SV of new machine + tax saving on loss + wc) discounted to PV. Both the above - Net ICO gives the Inc NPV. ICAI method is just another method of computation where depreciation and tax saving on loss is shown separately. So any method will give the same value. (There is one mistake in the key, the tax shield on capital loss is computed at 30%, where it should have been 40% as per the question)

aditya yanamandra

Faculty

11-May-24 21:39

Thank you much for the explanation sir 🙏

Thread Starter

Abi KVA

CA Inter

★ 2K+

11-May-24 21:49