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for part b, I thought the PV factor =31600/34500? Why does the solution add "150" to the numerator?
I should add that I know the formula for PV factor = (PV + int rate PFAD)/undisc estimate
but what is the logic behind adding int rate PFAD to the numerator?
I think it would be to be more conservative since the factor is scaled by (1-PV factor) A higher PV factor would lead to a lower asset for future income tax.
Comments
I should add that I know the formula for PV factor = (PV + int rate PFAD)/undisc estimate
but what is the logic behind adding int rate PFAD to the numerator?
I think it would be to be more conservative since the factor is scaled by (1-PV factor) A higher PV factor would lead to a lower asset for future income tax.