Hi,
Just had FM exam yesterday, Can anyone help me to find the correct answers for below questions?
In NPV money terms question we were given a general rate of inflation no specific inflation Then operating profit in real terms, later in the question it was said that the operating profit was after not tax allowable depreciation in real term Then the scrap value was in real term as well Could you please tell me if you would add back the depreciation to operating profit and inflate with general inflation? Would you inflate the scrap value with the general inflation as well ?
2nd question In EOQ For annual cost Holding cost= average inventory +Buffer inventory × holding cost Will it be annual cost = holding cost + Ordering cost +((annual demand +buffer inventory) × purchase cost)
