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AAFM CWM_LEVEL_2 Exam - Topic 6 Question 64 Discussion

Section C (4 Mark)Read the senario and answer to the question.Mr. Mehta buys machinery for Rs. 80000 which is to be replaced after a period of two years. The replacement cost at that time will be Rs. 90000. As a Chartered Wealth Manager advice Mr. Mehta now what he should do after two year for the replacement of the said machinery?
A) He should buy the new machinery first and sells the old machine in the next financial year
B) He should sell new machinery first and buy the old machine in the next financial year
C) He should buy and sell the machine in the same financial year
D) He should buy and sell the machine in the financial year 2011

AAFM CWM_LEVEL_2 Exam - Topic 6 Question 64 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 64
Topic #: 6
[All CWM_LEVEL_2 Questions]

Section C (4 Mark)

Read the senario and answer to the question.

Mr. Mehta buys machinery for Rs. 80000 which is to be replaced after a period of two years. The replacement cost at that time will be Rs. 90000. As a Chartered Wealth Manager advice Mr. Mehta now what he should do after two year for the replacement of the said machinery?

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Suggested Answer: A

by Billye at Aug 28, 2023, 06:22 PM

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Blair
7 months ago
Is it really worth it to replace it so soon?
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Margurite
7 months ago
Totally agree with A! Best way to handle it.
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Rochell
7 months ago
Wait, why sell the old machine first? That seems risky.
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Kimberlie
7 months ago
Option A sounds right! Buy new, sell old.
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Cathern
8 months ago
Mr. Mehta's machinery costs Rs. 80,000 now and Rs. 90,000 later.
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Moon
8 months ago
I think option A makes the most sense since it allows Mr. Mehta to have the new machinery ready while selling the old one, but I’m not entirely confident.
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Brigette
8 months ago
I feel a bit confused about the financial year references in the options. Did we cover how that affects tax implications?
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Billy
8 months ago
This question reminds me of a practice case where we had to analyze the costs of holding versus replacing assets. I think buying first and selling later could be beneficial.
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Candra
8 months ago
I remember discussing how timing the purchase and sale of machinery can impact cash flow, but I'm not sure which option is best here.
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Marvel
8 months ago
I'm pretty sure HP uses Scalable Print technology for their page-wide InkJet printing, so I'll go with option D.
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Shawn
8 months ago
This is a tricky one. The graph doesn't give me a clear indication of what type of process it's showing. I'll have to make an educated guess and hope I can eliminate some of the options.
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Lon
8 months ago
Hmm, I'm a bit confused about the distinction between failures and defects. I'll have to think this through carefully.
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Louis
8 months ago
The key here is to identify the most significant drawback of a cost-based approach. I think option D about long-term efficiencies is the best answer, but I'll double-check my understanding.
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Johna
9 months ago
I definitely recall LCSAJ being part of white-box testing, but I can't recall enough on condition testing to be sure.
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