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This was my third attempt and I am so glad that I passed. only one more exam left now to pass. Feeling positive.
Ok. I sit this exam in march and june so this is my third attemp. Topics included performance pyramid, TQM, cost of quality, assessing the positives of a performance measurement dashboard, ROCE, EBITDA, benchmarking, target costing and target cost gap, and integrated reporting (7 mark question). Think the last question was about reward or appraisal system, I didn’t read it in detail because I did not choose that one.
On another note: I think it’s just important to tell you that ACCA revision lectures held through webinars are saved and can be downloaded from vimeo. I think these are very helpful.
This exam was much better than the June one so I am hoping for a pass. I am already tired and frustrated with this exam, just want to pass and move on. Just hope I wrote enough and applied enough to the question to get that pass. Aye.
@scared123 said:
You mean Q2 the EOM paragraph issue?
I personally don’t think so.
KAM is determined when the matter has been communicated to charged with governance, then matters that requires significant attention during the audit – which they said the audit evidence has sufficient and appropriately obtained, does not pose any challenges to obtain the evidence, then the final KAM which is most significant in the current audit.I don’t think KAM is suitable at this point.
ok, that was what i was refering to. I just thought it was a KAM since it said it was significant. Thanks.
This was my second attempt and it was a disaster. I studied hard for this exam and I feel defeated. All my previous exams I passed the first time. Now I am down to the last two and I cant do it. The questions was long and detailed and there wasn’t enough time to answer the questions. I wrote something for each question though. Really wasn’t expecting so much on budgeting and that ROCE calculation was complicated, I got lost and I knew I calculated wrong but there was not enough time to figure what I did wrong and fix it. Some questions seem vague, I didn’t know what the examiner expected us to write. aye, I hope I did enough for the 50%.
average method is automatically applied. strict method is used if the tax paper has elected to use this method.
I think I passed. I did all the question. I don’t remember my answers though. but the main thing that puzzle me in the exam was the mutually exclusive projects in #1 but that’s not worth much points, so I think I am good.
for #2 I got 292 as well; whatever difference I had I put to retained earnings because I know I didn’t calculate that rights issue correct. I think I passed.
ok. Thank you. I must have misunderst. kindly explain ACCA answer to the 2008 Dec question #3c
Question: Explain how the capital asset pricing model can be used to calculate a project-specific discount rate and discuss the limitations of using the capital asset pricing model in investment appraisal.
Answer: The CAPM can be used to calculate a project-specific discount rate in circumstances where the business risk of an investment project is different from the business risk of the existing operations of the investing company. In these circumstances, it is not appropriate to use the WACC as the discount rate in investment appraisal. The first step in using the CAPM to calculate a project-specific discount rate is to find a proxy company that undertake operations whose business risk is similar to that of the proposed investment. The equity beta of the proxy company will represent both the business risk and the financial risk of the proxy company. The effect of the financial risk of the proxy company must be removed to give a proxy beta representing the business risk alone of the proposed investment. This beta is called an asset beta and the calculation that removes the effect of the financial risk of the proxy company is called ‘ungearing’. The asset beta representing the business risk of a proposed investment must be adjusted to reflect the financial risk of the investing company, a process called ‘regearing’. This process produces an equity beta that can be placed in the CAPM in order to calculate a required rate of return (a cost of equity). This can be used as the project-specific discount rate for the proposed investment if it is financed entirely by equity. If debt finance forms part of the financing for the proposed investment, a project-specific weighted average cost of capital can be calculated. The limitations of using the CAPM in investment appraisal: difficulties associated with finding the information needed (this applies to the equity risk premium, the risk-free rate of return, locating appropriate proxy companies with business operations similar to the proposed investment project); Most companies have a range of business operations they undertake and so their equity betas do not reflect only the desired level and type of business risk; the assumptions underlying the CAPM can be criticised as unrealistic in the real world. For example, the CAPM assumes a perfect capital market, when in reality capital markets are only semi-strong form efficient at best. The CAPM assumes that all investors have diversified portfolios, so that rewards are only required for accepting systematic risk, when in fact this may not be true. There is no practical replacement for the CAPM at the present time, however.
