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Are you saying you added back depreciation for cashflow purposes but deducted tax from the operating profits given in the exam?
I thought corporation tax was deducted from taxable profits, which is after adding back depreciation, and then capital allowances produce a tax saving.
I could see how your method would produce a positive NPV whereas the method I used produced a negative NPV.
Since the exam I have looked back at loads of past papers and can’t find a similar question which could give us all some clarity. Would be great to get some feedback from John Moffat on this question wouldn’t it?
I got negative cashflow in August but closed on a positive. From three ways to manage cash better I said timing of cash flows as should of borrowed loan in August or moved purchase to September and then wouldn’t of incurred overdraft interest?
The same as most, I got negative NPV but now wondering if I inflated the cash flows before adding back depreciation first!! I hope I didn’t do that as it’s obvious now I’m not under exam pressured conditions.
Reasons for holding cash I used transaction, precautionary and speculative but don’t think I write anywhere near enough to get six marks if this was even the correct answer that is?
Agreed part A was the trickiest I have completed, and think I flagged around 8/9 questions.
Not sure if I passed but feel the same as I did with F5 and hope I’ve done enough to marginally pass as that would be good enough for me!
Good luck to all!
I studied so hard for this exam answering questions every day for a month, used various texts and watched hundreds of lectures BUT still not confident re yesterday’s exam. I know we are warned that it’s not just calculations but part C was about 32/40 discursive in my opinion! I got decision package which seemed to test relevant costing and ABC, and then performance management Hotel which I initially drew a blank but went back to in last 30mins, but put new menu suggestion under customer, which should of gone to innovation maybe? Anyway The hardest bit for me was actually part A and B. And no linear programming or minimax regret, my favourites!! No planning or operational variances either!