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Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
Hi sir, where does the 7 per annum in q3 come from?
The coupon rate is 10%, there is tax at 30%, so the net interest cost to the company on $100 nominal is 70% x 10 = 7 per year.
Did you watch the free lectures on this before attempting the test?
Nice Test
🙂
Sir i am not getting 5 percent growth rate in question 2. Kindly help. When i take root (36/33.1)^.3333 i get different answer.
I don’t know where you are getting 33.1 from.
It should be (36/31.1)^0.33333 – 1 = 0.05 (or 5%)
sir in question 3 ,
I don’t get why we multiply 36 by 1.05
why do we not just divide 36 by 540 and then add the 0.05
sorry i meant question2
Because that is what the formula provided on the formula sheet requires!! Did you not watch the free lectures first?
Sir there is an issue with the question 3 answer. The annuity df for 5 yrs is 3.791, not 3.761 as you stated in a previous comment. The npv @10% is $ -4.847 .The irr will come to 12.89%
The npv @10% is *$ + 4.847
I assume that you are referring to my comment from 2017. There was indeed a mistake in my comment and I have now corrected it. The IRR is not 12.89% however. It is 11.45%.