[Anonymous]

So I just finished (partially) taking a Final Exam in Becker’s software for BEC and I was really confused and shocked that I got an NPV MCQ wrong but GOT the payback period method correct (when for both questions I did the same type of math).

In the NPV MCQ: the “correct” answer to them was NOT to include the costs of installation and shipping to the initial cost of the investment. Therefore “their” depreciation was just the Cost of the Equipment / # of years.

The next MCQ (payback period): the “correct” answer to them was to include the cost of installation and shipping to the initial cost of the investment. Therefore “their” depreciation was Cost of Equipment + Installation + shipping / # of years.

Isn’t the depreciation determination the same for both methods? The cost of putting a machine together is added to the cost of the machine itself – regardless if it’s NPV or Payback!!!!! Am I wrong or is Becker wrong????? Hopefully someone can clear this up for me – ahhhh!

[mrwills12]

It is hard to tell you exactly what is going on without the problem. However, i did have a similar problem with a couple of the Becker final questions. The problem that i had trouble with was also an NPV problem, i like you included installation costs in figuring out the NPV. HOWEVER, i did not read the question carefully because at least in my problem's case the question stated something like this … the amount of money the piece of equipment was bought for or would be bought for is XXXXX and then it said INCLUDED in this amount is installation fees of $XXXX.

I initially added the installation fees to the cost of the equipment because that is what the formula states, but because the problem already stated that the installation fees were included in the “cost of equipment” number they gaev you, you dont add them into the equation. Make sense?

For BEC especially you have to read the questions carefully because one word really changes up the answer/equation.

FAR - 88 (Jul 2012)
AUD - 85 (Oct 2012)
BEC - 82 (Nov 2012)
REG - 92 (Jan 2013) DONE!

Using Becker Self Study 2012

[Anonymous]

@mrwills12 – yes, you are right. I just checked the question and it said “invested $600,000 in the cost of the project, including $40,000 in installation charges.” Thanks for the heads up, I was beginning to lose my mind. I think I need to get some rest, I've been working 12 hours days for the past 2 weeks for year-end close at my work + 5am study sessions. Why did I sign up for the exam the Saturday after this crazy close? The world may never know…………………

Thanks again! Much appreciated!

[Anonymous]

@mrwills12 – yes, you are right. I just checked the question and it said “invested $600,000 in the cost of the project, including $40,000 in installation charges.” Thanks for the heads up, I was beginning to lose my mind. I think I need to get some rest, I've been working 12 hours days for the past 2 weeks for year-end close at my work + 5am study sessions. Why did I sign up for the exam the Saturday after this crazy close? The world may never know…………………

Thanks again! Much appreciated!

[Author]

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