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Passed on my second try. On my first try I got 44% and now 57%. For the second try I practiced full Revision Kit questions (total of 80 questions), Mock exam and 2 or 3 past papers. I only have APM left.
Good day, can someone help me on question below? It is from revision kit question #241 but did not get it.
An investment centre has prepared the following forecasts for the next financial year.
$
Operating profit before depreciation 85,000
Depreciation 20,000
Net current assets at beginning of year 30,000
Carrying value of non-current assets at beginning of year 180,000
The centre manager is now considering whether to sell a machine that is included in these forecasts. The
machine would add $2,500 to divisional profit next year after depreciation of $500. It has a carrying value of
$6,000 and could be sold for this amount. He would use the proceeds from the sale plus additional cash
from Head Office to purchase a new machine for $15,000. This new machine would add $5,200 to divisional
profit next year after depreciation of $2,000.
What will be the expected return on investment (ROI) for the division next year, assuming that the manager
acquires the new machine and that non-current assets are valued at the start-of-year carrying amount for the
purpose of the ROI calculation.Answer:
(Syllabus area D5(c))
The correct answer is: 30.9%
Capital
Profit employed
$ $
Original forecast 65,000 210,000
Effect of machine sale (2,500) (6,000)
Effect of machine purchase 5,200 15,000
67,700 219,000
Revised ROI = 67,700/219,000 = 30.9%Hi guys, I have one question regarding marking scheme.
If for instance questions states that it is scored by 6 marks and asks to provide examples of substantive procedures, how do i know how many procedures to list to get maximum of 6 marks?
Thanks in advanceWhen preparing consolidation question i did all the workings and calculated Goodwill. Then constructed P&L but across the account lines i wrote amounts which have to be summed (for example: Revenue 54,234 (w1)+456+3429/12*9) and did not calculate final results of the sums because did not have time. Is it alright like that? 🙁
