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Capital rationing and sensitivity analysis – ACCA Strategic Business Leader (SBL)


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Comments

  1. duncana says

    December 28, 2020 at 10:48 am

    The lecturer worked out the sensitivity analysis in percentages. I did it in amounts. The question doesn’t specify which is needed so I would be correct to show my answer in values?

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    • Ken Garrett says

      December 28, 2020 at 2:04 pm

      It could be. However, I think that the value has to be related in some way to the proportional or percentage change in the original assumption. A value of 5 is very different if you are talking about the change in sales where the original assumption was 10,000 (V sensitive as you could easily be wrong by 5 in 10,000) or you are talking about a change in cost where the original assumption was 10 ie getting costs wrong by 50% might be thought of as unlikely.

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  2. Ken Garrett says

    June 24, 2020 at 7:21 pm

    Where are you talking about -notes? Lectures? Where?

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    • bhaven28 says

      June 24, 2020 at 8:37 pm

      Around 7:32 on the lecture under the 10% factor it shows as 3.17, 3.17 and then 0.683

      Many thanks

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      • bhaven28 says

        June 25, 2020 at 4:18 pm

        Hello any update on this please? just need to know how this was worked out

      • Ken Garrett says

        June 26, 2020 at 6:16 am

        The example is from P159 of the notes where 10% is given as the discount rate to use.

      • jetavi says

        July 4, 2020 at 6:28 am

        From years 1-4 Sales and MC are having SAME CFs for EACH of the 4 years,hence, we will discount these using annuity factor for 4 years at 10% which is 3.17.

      • Ken Garrett says

        July 4, 2020 at 3:08 pm

        Yes.

  3. bhaven28 says

    June 24, 2020 at 6:51 pm

    Hi,

    This may just be a refresher, but how do you work out the 10% factor?

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