Hi, IAI May 2015 Q17 is again regarding the calculation of present value of two scenarios. In part (I) shouldn't we also show a 9,00,000 negative cash flow as 20% of 45,00,000 needs to be paid as capital gains tax? In the solution they have ignored this figure. Rest of the question is okay but because of this the answer is different. Please respond soon! Thanks!!
Hi This may be because they have asked to calculate just the PV OF INVESTMENTS and not the full transaction.
Hi, Ok agreed, but then when asked which ALTERNATIVE is most profitable then shouldn't 900000 be considered as it is a part of the alternative? Thanks for the help!!
I think what's best will be to write down separately that the PV of investments are this much and to choose from only investment point of view, option 1 is advisable. However, logically, the outflow should also be a part of the solution.
