[ifrah16]

Ran out of time 🙁
Only managed to attempt 63 marks out of which I didn’t even fulfill all the requirements 🙁
And now I have P6 to worry about…

Was hoping to pass the professionals on first attempt but it seems unlikely now…

[ifrah16]

<cite> @furqan2994 said:</cite>
My paper was all messed up just bcz of this NPV question…I used 1.55 instead of 1.055 for VC ..and my NPV came (7000,000) ….and I wrote comments on this too :p ….later i corrected it but by cutting and overwriting but I don’t know whether examiner accepts re writing and over writing..

I made similar mistakes in the WACC and EPS questions (using incorrect figures due to silly mistakes) 🙁

But I crossed the answers out and re-calculated the whole thing… Which eventually cost me 15 marks in the end which I left unsolved 🙁

[ifrah16]

<cite>@aneeb123 said:</cite>
i dont understand why people are saying they didnt increase the units by 9000 units … in the npv calculation you should use 9000 for each year because that is the increment in units .. 9000 to 18000 ..increment of 9000 so use 9000 so forward so forth

I didn’t think I was right (by taking 9000 units per year) after someone here posted the same thing you did, and I felt pretty stupid for misunderstanding the most basic question, but then everyone else started saying it WAS 9000 through years 1-4 because the figure given wasn’t incremental, it was additional… But hopefully whatever it was it shouldn’t be more than 4 marks (max).

[ifrah16]

<cite> @wall19 said:</cite>
In q1). For NPV, how many marks will be lost if the sales figures are wrong??. I did not increase the units by 9000 each year.

I didn’t either, but apparently that was correct *phew*. It was supposed to be 9000 units for each year (according to most students who have posted on this thread). The units affected variable costs too.. But out of 12 marks it wouldn’t be too much.. If you have written 9000 for years 1-4 it should be fine 🙂

[ifrah16]

<cite> @furqan2994 said:</cite>
Did anyone inflated the scrap value…like 5000,000 * .05 = 250,000 * (1.049)^4 ……………………..supposing general inflation rate was 4.9%

Scrap value is supposedly given as a nominal amount (i.e. the value we would receive in 4 years time, not the present scrap value of the asset >> the future value)… Perhaps if you included a note saying you assumed it was given in real terms you may be given marks. 😀

[ifrah16]

I think we come under pressure – I know I definitely did, don’t know about the others. I was freaking out, using wrong figures for values EVEN THOUGH I had calculated the correct figures.

The art of professionalism is to be able to clear out the ambiguities and solve problems using a lot of random data in the time given – to be able to work with all that we have. If we mentioned our assumptions I think the markers will give us the credit due.

In all honesty the examiner could have REALLY complicated F9, by asking very detailed, specified questions. Vague but rather unsophisticated questions are much easier to handle because as long as we state our assumptions and stick to the rules I think we get the marks we deserve.

[ifrah16]

<cite> @sharlene20 said:</cite>
yes i included pref shares along with debt and equity, however i didnot include the loan as i did not have a market value???? any take on this

I used I(1-T) as the cost and the book value as the market value, because I thought the MV would be the same in the case of an untraded loan (i.e. bank loan).. I think that was wrong 🙁

All I can say is, I hope we both pass! (Y) 😀

[ifrah16]

<cite> @meazakiros said:</cite>
could you tell me the answer for financial objective

I wrote maximization of SH wealth as the first objective, and for the second I wrote profit maximization (and explained the difference). I could be wrong though…

[ifrah16]

<cite> @skay123 said:</cite>
Hi guys,
In the WACC calc….working out the cost of the redeemable loan note ……in the irr calc for df@5%and 10% for both Npv I got was negative…did anyone get this or maybe I went wrong with the calculator….????.?

I did but 5% came to something really low like 2.xx and 10% was negative so it worked out in the formula.. I don’t really remember my IRR figure though.

I think the MV was $104.7x, the interest was $4.9% (net of tax) & redemption $100… And it was either for 6 years or 10 years, I don’t really remember :/

So you can recalculate the average if u remember the no. of years..

[ifrah16]

<cite> @merkada said:</cite>
to me it increased by 9000 per year

OMG REALLY? You mean like 9000 in year 1, 18000 in year 2 & so on? What was your NPV?

I even messed up the WACC question by including retained earnings – I actually went back to fix it 🙁

I guess I haven’t been reading the questions properly… 🙁

[ifrah16]

<cite> @merkada said:</cite>
for the unit did yall use 9000 4 the 4 yrs?

Yep.. that was fixed for the 4 year period wasn’t it? Or was it given as 9000 in the first year only?

The thing is, if we weren’t to use 9000 units then what else were we to use? :S

[ifrah16]

<cite> @kumail.alee said:</cite>
my money mrket hedge was more profitable…:;p

Really?? Are you sure – there wasn’t much difference between both.. They were both $29xxxx aand although I selected MMH, everyone here is saying FMH was cheaper :(… I think I must have made a calculation mistake because I covered foreign currency pretty well (conceptually)..

[ifrah16]

<cite> @icedawn said:</cite>
no it said to calculate wacc based on market values !! if it said book values then yes reserves should be taken

OMG I went BACK to change it – I crossed my answer out calculated the WHOLE THING again… :'(
I feel so stupid :O 😐

[ifrah16]

<cite> @icedawn said:</cite>
Question 4 (d) was very ambiguous !!!! what was required ?
to discuss the factors afffecting traded bonds firstly? then dicuss facors affecting placing and venture capital ?
or discuss factors taking all three into consideration ?

I think it was to discuss the factors affecting choice of raising equity through placings/venture capital vs. trading bonds.

It seemed a little similar to the next part which asked for a debt vs. equity discussion..

[ifrah16]

<cite> @lfrancus said:</cite>
i think this paper was quite fair but i was bad at time management…. attempted all questions but did finish…. were you all able to finish in time…just wondering if am just slow…

THANKS TO OT

Me too Frank, I left 15 marks completely unsolved from my last question (Q. 3) and did the hedging parts in the last 10 minutes – I spent 5 mins on the theory and 5 for the FH/MM hedge.

The investment appraisal and WACC calculations were REALLY lengthy they took up most of my time cause I tried setting them out well for the examiner… But it was at the expense of the theoretical parts and the last question I attempted, which certainly wasn’t worth it 🙁

[ifrah16]

<cite> @bkali1 said:</cite>
Q1 NPV was around 4550 for me (but I don’t know whether that is right or not)

Q3 mmhedge today borrow was 489 euro (819 dollar) and 3 months time 827
fmh was around 824 for me (a little bit lower) but I might be wrong with these number

Q4a, share price 437

Q4b, EPS 27cent

q4c, EPS around 28-29c

I got the same – but I think I had 27c for the current EPS, not the revised EPS.
How did you adjust the PAT?

Did you include the 18% on 3.2m? And then did you net it off the tax?

18% of 3.2m = $576,000
Net of 20% tax = 460,800

I added that to the current PAT and then deducted 100,000 from it (I don’t remember why though)…

Then I divided the figure by 10,000,000 shares to get EPS.

[ifrah16]

For the WACC calculation, were reserves to be added to the MV of equity?

[ifrah16]

<cite> @donizback said:</cite>
It was D0 bro i did it that way and got the growth 4%
And the forward maket was almost 294000+( dont know the 0’s figure) and the money market hedge was 296000+( forgot the exact figure) what was yours? I m totally sure this is correct because I am perfect in hedging 😀

I thought I got that right cause I had hedging on my tips, however I did it in the last 5 minutes (last question) so I could have made a calculation mistake.. I got a very similar figure something like 29**** for both as well

I think you are right D0 not D1..

[ifrah16]

<cite> @kathyatk2 said:</cite>
Was the hedging question pay or receive 500,000 euros?

I think it was receive..

[ifrah16]

<cite> @narinemalakyan said:</cite>
Did you inflated working capital (500,000$) in Q1 a when calculated NPV for the project?
tax relief for WDA was starting with T2, right?

I took tax in year two as it was payable one year in advance and the CAPEX date hadn’t been specified..
I didn’t inflate the working cap since, according to my understanding, it was in year 0.. But I think I got that wrong now 🙁

[ifrah16]

I thought it was quite easy, but I kind of freaked out… Does anyone know which option was the best (according to EPS)? I thought it was option 3 because the PAT was increasing (net of interest costs and tax) but the no of shares stayed the same.

There was a question which had dividends given under a number of years.. Did anyone calculate the growth as the root of (FV/PV) – 1?

And was the dividend given under option 1 D0 or D1? I took it to be D1. But now I’m thinking it was D0.. 🙁

Oh and was the answer, to the question on foreign currency, a money market hedge?

[Author]

Posts