[hsnkzmi]

@aagshin said:

@hsnkzmi said:
I understood your question but i have no idea …
I also asked on the forum to have an idea because i’m still confused …

Cf’s will be taken for the years 0,1,2,3,4,5-10 . From 5-10 years there were same cf’s and a cumulative disc rt might as well be used.

I think the CF after the year 5 will not be the same because of inflation factor. If you are talking about real rates you are right. Am I right?

If the cash flows are the same the disc cash will give the same results no matter what rates are used

[hsnkzmi]

@coralienana said:
I understood your question but i have no idea …
I also asked on the forum to have an idea because i’m still confused …

Cf’s will be taken for the years 0,1,2,3,4,5-10 . From 5-10 years there were same cf’s and a cumulative disc rt might as well be used.

[hsnkzmi]

@lukman94 said:
How are they wrong lol ? The Text clearly said the Scrap value was zero. If you look at previous exams where depreciation has been on a straight line basis you simple take the initial investment over the assets useful life multiplied by the tax rate. This gives you the tax relief per year. It was a fairly simple question that many people are over complicating.

Thats’s cause their perception of cash flows from a project is wrong. The question specifically said that from 5th year on wards the production will carry-on at 200,000 U’s an year. How can you end the question at 4 years , when in reality it does carry on for a longer period? how can you just take cf’s upto 4 years and not any further? the periods were as follows – 0,1,2,3,4,5-10
lol

[hsnkzmi]

@aagshin said:

@hsnkzmi said:
That’s cause you had to spread it over 10 years, that was also mentioned in the q. So, all calc for 4 years are 100% wrong, cause then you’d get a residual value and the q mentions complete dep to value 0

Hi firend, I did it for 10 years, do you think that it is correct?
Because With ignoring the years 5-10 you can not calculate them by multiplying by annuity factor because of inflation. I calculated 1-10 years with nominal rate with inflation (with 1250 Tax allowed dep) and with 6%(real rate) without inflating the figures. Got arounf 84K with nominal and around 70K with real rate.

Besides did anybody remember with what doscount percent we have to fidn a doscount factor for debt in WACC question(I guess it was q31)? I used 5% and 7% for finding it in valuation of debt.

Prima facie it looks good.Although each of us gets different answers its really your grip of the concept that matters.

[hsnkzmi]

@ali17 said:
Could you please let me know that in pay back question where was the discount factor in that question the discount factor was given in npv part not in pay back and roce question part

we use the same disc factor. its not different for npv or disc.payback

[hsnkzmi]

@ali17 said:
What about the roce and mcq 1 receivables for the year or avg receivables question ask the receivables not avg receivables

Both q’s have been done erroneously by most students, roce is 37% , most students forgot roce uses accounting profits and not cf’s therefore to arrive at acc. profs we deduct the dep. next we divide the total profits so calc, by initial inv + salvage value / 2.

for the receivable q . its average and not year end

[hsnkzmi]

@coralienana said:
If i understand you correctly someone who did 4 years and had a residual value ; that’s OK ?

Yes that’s correct! The question itself mentioned linear dep, which never leaves a residual value and is proportionately spread over the effective economical life of the asset.

[hsnkzmi]

@coralienana said:
I don’t know what he means. He just says the scrap value can’t be 0 because they say it’s on a straight line over 10 years and the scrap value would have been 0 after 10 years. Therefore, there was a little scrap value after 4 years.
I don’t know how …

That’s cause you had to spread it over 10 years, that was also mentioned in the q. So, all calc for 4 years are 100% wrong, cause then you’d get a residual value and the q mentions complete dep to value 0

[hsnkzmi]

@coralienana said:
Yes i know 10 years was requiring a lot of calculation for the time we had and the marks allocated … That’s true …

I have myself screwed up pretty bad but it was 1,2,3,4 and 5-10 years
5-10 was cumulative in every sense of the word. Also, dep was linear so no prob.

[hsnkzmi]

@andreea10 said:
It was irredeemable, so I guess it was: 100*Discount factor for the no of years? Didn’t find my answer between the options given so I was wrong.

seriously speaking i dont even remember what they asked , but if it was irredeemable bonds and the q asked the value then you just dont after tax the i/m.v

[hsnkzmi]

@coralienana said:
For question 31, what did you choose between redemption 10 years or convert into 10 shares ?

It’s my first attempt and i found it quite difficult ! i did not even have time to finish the exam, i guess we need more time or i’m not speed enough.

Also, they provide too much unnecessary information and you need to stay focus otherwise you might use information which is not necessary.

I found the MCQ more difficult that the ones i did in BPP… So i’m quite confused.

welcome to Accca, never be demotivated, you’ll pull through . Most important is to maintain the morale. f9 ‘s the buff here among the f series papers, so try again you’ll do it.

I’m just starting ACCA, and chose that exam but if i fail i could be demotivated…

[hsnkzmi]

@tpara said:
Thank you very much

no probs mate, were partners in struggle lol

[hsnkzmi]

@tpara said:
I am really interested that how they will mark WACC calculation? It was 10 mark.Can every little number be marked? I mean, for example calculation of market value of equity is 2 points?

step marking is involved and each and every step gets marked , if you have the bpp practice kit, you can refer to the sample section C , they have an indicative marking scheme prior to the solved answer

[hsnkzmi]

@tpara said:
I have read book and did revision kit,mock exam, past papers several times.Also watched John’s lectures but i dont know why my answers are so different from others))

maybe you’re lacking on the conceptual front as what i have been reading in your comments. now I am no expert , but still if you need help kindly mail me, i’d be happy to help. ciao

[hsnkzmi]

@sarahb1985 said:
Payback 2.4

Not wc – sales

For the wacc convert or redeem were we meant to calculate the cost of debt for both and use the lowest?!

we had to compare what gave us the most value conversion or redemption , it was conversion.

[hsnkzmi]

@tpara said:
After reading comments, I guess it will be my second fail 😀

dont worry, you’ll make it through. Just hang on. Also, john’s lectures are awesome , do watch them plenty times and practice. if you’d like any more correspondence kindly mail me at kazmi.ht@gmail.com

[hsnkzmi]

@amirawasim said:
In question 31 after finding conversion value the loan notes were convertible so i found the cost of debt from them and thats how i got WACC around 5 i dont know if its correct as most of you are saying around 12. I got ex dividend by subtracting current divided from cum dividend and used it to calculate Ve
In the dividend policy part b just wrote about Retention and inflation and limits on dividend distribution is to be considered and exaggerated it.

you’ll be step marked. expect around 40% marks in the 31 q and around 20-30% marks in the 32q. Hope you’ll make it through inshallah. ciao

[hsnkzmi]

@andreea10 said:
Hi everyone. How did you calculate the Market value of the 6% loan note, with a nominal value of 100, cost of capital 9%? Hope I remember the figures right.

mv of 6% loan notes is easy to calc. Just disc the interest inflows before tax
(cause youre calc the value and not the cost) then disc em. after that compare the values of redemption and conversion , chose the higher and disc. add the pv’s up and done

[hsnkzmi]

@daisypeg said:
Definitely failed this one last f paper and was hoping for all first time passes :’(

dont worry you’ll 100% make it this time. Just watch all of them john lectures over and over and plus practice is imperitive.

[hsnkzmi]

@coralienana said:
It seemed Easy at thé moment but when reading your answers it looks obvious that i failed

I presume the major determinant here will be the mcq’s cause we all messed up the section c

[hsnkzmi]

@joevika said:
the answer was 20.5%. It was in a practice question i did.

could you tell me where you did it? what book? and are you talking about q31?

[hsnkzmi]

@tpara said:
What was your answer for WACC?

mine was rounded off 12%

[hsnkzmi]

no only the highest, we calculate what value we would receive on conversion and redemption and chose the highest, you dont have to calc. the entire cost again. kindly view John’s lecture on valuation of debt.

[hsnkzmi]

its the answer to the mcq roce question

[hsnkzmi]

a question of adding up reserves would only arise when we use book value weights, While using m.v weights were already adding up the reserves (security premium) in the price. so no further need.

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