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@mannyx1993 said:
Time management was an issue for me in this exam as I only had 20 minutes for question 3, 10 of those minutes were spent staring at the question trying to understand what it was asking.
Same here.
I was reading the same sentence for 15 minutes, over and over again. Desperate to understand what they were asking….Yeah. The 3rd question seems to be a huuuge problem for all the candidates. Hope they realize it was a mistake on the examiner’s part and they are lenient on the marking.
im not sure but i can remember caluclating 24000hrs required somewhere.
Theres truly no right answer here right. They just see if our answers make sense. I agree that Excelsior is a new customer but the thing is as they will be marketing it with theyre own name it would mean our products will not have our own strong brand name which is vital for success.
Again it all comes down to how we present our answers.
The financial implications was a bit tricky.
Although BB alone showed the higher contribution the question ask which should be prioritised first then the other partly.
This way prioritizing Excelsior gives us the higher contribution because the balance will be used in product A for BB which has the higher contribution per labour hour and less from product C which has lowest contribution.
Prioritizing E gives us 94$ whereas prioritizing BB gives us $91.
Non financial Implications are dissatisfaction of existing retailer, less geography covered through Excelsior since only one store compared to retailer chain.
spent way too much time on the calculations than available.
The last question ruined the exam. What were they thinking? 20 marks for that and the question was not even clear on what it wanted us to do.
This leaves all the students to get 50 out of 80. Totally unfair.
Whoever made this paper needs to be sacked. We were only given extremely useless bullet points like ‘Strong leadership’ and they wanted us to evaluate how this is leading lo customer loyalty and retention? Absolutely diabolical.
i was reading the question for 15 minutes and i had no idea what they were asking. Can anybody tell me what was required of us?
Guys!!
In the hedging question the BASE rate currently was 4.4% right?
ahhh. Im going mad thinking about this. 😀
@finansist said:
@ivonne year 1 was given as an absolute figure and years 2,3,4 were given as a percentage increase werent they? I maybe wrong i cant exactly remember.
I now remember that from year 5 synergy savings of 400000 shouldnt be added but i think i added them ((((((. Thats why i got abnormally high figures for Polymnia value. With 5% growth above 50mln and with 0 growth 30mln
However i commented on those figures that 20mln purchase is bargain for Clio but P’s shareholders unlikely agree to this price and so on…… I hope i will get marks for the comments
Hope we’ll pass!!i dont think it will cost you much.!!!
The marking system is on OWN FIGURE basis.
Yeah. I agree with ivonne.
The examiner just wanted us to evaluate the projects. The soft capital rationing was only meant for the last part of the question.
We had to write the answer out like in the technical article.
Recommending the ones with postie value and indicating whether there is enough time for the Npv to become positive or not. essentially stating which projects needs to be ‘nutured’.
I dont think so sahil1234.
Looking back at the past papers , the examiner has clearly meant that the increase in x amount of interest rate is actually the bank rate increase.
example AWan Co (12/2013)
Maybe im misreading what you are saying.
@sahil1234
I’m not sure i understand what you are saying.
Do you mean that the current BASE RATE was 4%?
what unexpired basis did you get?
I got a clean .77 * 1/7 which i thought showed me that I was on the right track. 😀 🙂maybe i’m wrong.
Did you find the value to equity holders of Clio after finding the FCFF values?
If so did you deduct the amount paid to get to the additional value to Clio
or did you use the 55% to find the equity value?
There were two rates to be used.
Clio director wanted to use Zero growth after year 4 and Polymnia wanted to use 5% growth rate to perpetuity.
So we had to find two FCFF values.
-(L+0.4%)+L-5%
the way you have typed it out the +.4 is in the bracket.
So – x .4 = -0.4
giving us an EIR of 5.4%I think the swaptions wanted us to explain what 1 X 4 meant and then show the effective rate achievable.
Since hickamore can and usually does borrow at L+.40
They will receive L
Pay 5%
giving an effective rate of 5.40%Im not quite sure about this tho.
@ivonne
do you remember anything about the futures hedge?
What effective rate did you get?@ivonne
I dont know ivonne. Im still thinking that its an expansion.Delay options do not usually come in as a nested option- an option in an option.
Where as option to expand relies on the initial phase being executed.
Since Project E’s second phase can only happen it the first phase is executed I still think its an expansion.The second phase very well could be an option to exploit follow-on opportunities.
Come to think of it, an option to expand is a delay option with the only difference being it hinges on the another phase tbeing executed before becoming available.
Hmm. Cant remember them specifically saying that Project E was a delay option. But its just a technicality since both are call options.
But I highly doubt it.
Anyone reading this, I highly recommend reading the technical article.
The question was entirely based on this.@adurich Yeah. thats correct.
Guys .
Although the calculations are the same the real option was AN OPTION TO EXPAND@adurich most probably only one mark.
Anyone got 5.46% for futures?
This was weird. Both alternatives came up with a loss but Effective rate was same tho.