Investment in debtors
This query is : Resolved
26 October 2016
In receivables management, while calculating invetsment in receivables we take total cost as a bse (variable cost + fixed cost)
in dat fixed cost should we consider depreciation aslo?
or we shall exclude depreciation and then calculate interset lost on investment in Drs?
which argument is valid :- 1) Depre should be excluded bcz its a non cahs expenditure
OR 2) Derpe is nothing but systematic allocation of fixed asset expenditure...so it should be inculded
Plz guide
in dat fixed cost should we consider depreciation aslo?
or we shall exclude depreciation and then calculate interset lost on investment in Drs?
which argument is valid :- 1) Depre should be excluded bcz its a non cahs expenditure
OR 2) Derpe is nothing but systematic allocation of fixed asset expenditure...so it should be inculded
Plz guide
01 November 2016
I think your second point is valid on basis that depreciation should be included in cost which is being part of fixed cost in order to arrive at reasonable accuracy.
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