[Gigakutkha]

I get it, thanks!

[Gigakutkha]

Thanks,

Just to clarify: my understanding is that in this question, we calculated Enterprise Value [EV] (but the examiner refers to it as a “corporate value”, which equals 47,994 mln).

EV=Market Cap + MV of Debt – Cash and cash equivalents

Is EV something different from the “corporate value”? Didn’t we calculate EV here?

Thanks,
Giga

[Gigakutkha]

Hi,
Thanks for your feedback.

I am copying from the Kaplan Exam Kit:
“Without taking account of the option to delay, the project has an NPV of
$12.73 million, which reduces to $0.73 million when the initial $12 million
investment is brought in to consideration. Although this is a positive NPV, it is quite a
small positive figure, so the project is very sensitive to changes in the cash flows.

By taking account of the option to delay the project, the value of the project
increases to $13.65 million (or $1.65 million after bringing in the unavoidable
$12 million initial investment).”

I may have interpreted these 2 sentences in a slightly different way in my question, but still, I think that the relevant figure for discussion should be the NPV in today’s terms (i.e. $10.34 mln) and not the NPV at the start of the project (2 years from today).

Also, as the second paragraph is linked to the previous one and I think, the same starting point (today or 2 years from today) should be used.

Anyway, ignoring what is written in the exam answers, my original question was: does BSOP show values of options as of TODAY?

Thanks a lot,
Giga

[Gigakutkha]

I passed (71 marks);
Did not expect actually – the exam was not too difficult, but it was quite tiring

[Gigakutkha]

Thanks a lot!

[Gigakutkha]

Thanks a lot for the answer and for your free lectures 🙂

[Gigakutkha]

Thank you 😉

[Gigakutkha]

thank you 🙂

[Gigakutkha]

Found the asnwer:
• A reversal of an impairment of a non-revalued asset is recognised in profit or loss.
• A reversal of an impairment of a revalued asset is recognised as other comprehensive income
and included in the revaluation surplus.

If you’d like to add some comment, I’d appreciate.
Thanks

[Gigakutkha]

Revaluation reserves are calculated just like retained earnings.
Group revaluation reserve = P’s revaluation reserve + 80% of S’s changes in post-acquisition revaluation reserve.
Hence, group rev. reserve=900+80%*400 =1220

[Gigakutkha]

LSBF uses proforma: it shows P&L for parent, subsidiary, group adjustments and finally, the sum of the three columns yielding Group Figures side-by-side.
Probably, this format is acceptable..

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