CIMA Advanced Management Accounting P2 Question # 15 Topic 2 Discussion

CIMA Advanced Management Accounting P2 Question # 15 Topic 2 Discussion

P2 Exam Topic 2 Question 15 Discussion:
Question #: 15
Topic #: 2

A company wishes to appraise a potential project. One of the project's relevant cash flows is the receipt, expressed in money terms, of $20,000 per year for the first 5 years.

The company's real cost of capital is 5% per year and the expected rate of inflation is 3% per year.

What is the real value of the expected receipt in year 2?

Give your answer to the nearest $10.


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