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Thank you sir..but u still havent answered my is1 question
1) Why is that for the 3 month payment basis risk is calculated as?
Profit or loss
April – to buy 0.6983
July – to sell 0.7002 (1)
0.0019 profitWN 1
End of April End of July
September future 0.6983 0.7002
Spot (1/1.439)ie 0.6949 0.6988 ie (1/1.431)
0.0034 * 2/5 0.0014dont we calculate it as
my answer
normally dont we doFuture price -0.6983
Spot-(1/1.431)=0.6986
=0.0005*(2/5)
=.0.0002Expected rate is 0.6983+.0002=0.6985
Hi sir ,
i am a little confused here
One person wrote the payment to bank is “fra of 4.82-4.99 and u said its correct.
another person wrote payment to bank is ” fra 4.82- actual return of “4.79” and u said that is coorect.can u tell me which rates we compare. As far as i understand FRA is 4.82 and actual rate is 4.79 so it making payment to bank should be “4.82-4.99” as the market is offering more than FRA
the kaplan 2019 kit suggests payment to bank “4.99-4.82″*48m**4/12
Sorry i also missed the following
the answer given by examiner is ” Total profit = £237.50 ? 5
= £1,187.50 ” which is same as my calculationfort this question why have they not calculated profit/loss on futures market ..we usually take into consideration the prfit or loss on net outcome right??
the answer given is
Outcome
$
Futures 12,688,550(CHF12,250,000 x 1·0358 = $12,688,550)
Remainder on forward market 51,790(50000* 1·0358)
–––––––––––
12,740,340Wow..super!! thank you sir.. i realised i took the wrong future price.. thank you 🙂
I am using 2019 Kaplan kit..here too in the question the the tax rate is 30%..but the PL given inthe question scenario is 210 & 178 which is not 30% of PBT.
Hi John..
No this is 2019 kaplan kit . but yes there is scrap of 4m. thank you so much
sorry my apologies.. the statemnt was
Increase in gearing. Repurchase of a company’s own shares allows debt to be substituted for equity, so raising gearing. This will be of interest to a company wanting to increase its gearing without increasing its total long-term funding
Hi sir,
Thamk you for the reply.I did notice how the 1st one is based on fair value and the shares are not yet determined, and the second the number of shares to be issued is already known and will not vary. My question was how come the 1st one is treated as liability and second as equity. I dnt quite understand how the treatment of “based on fair value” make it liability and
second one ” number of shares to be issued is already know” make it as n equity?
Thanks in advance
Hi jingdongyu
Im just studying for F6 and came across same question. This a very late reply but for the benfefuts of upcoming students the answer lies in BPP study Text 2019 on page 253 where they give penalty rate for “Deliberate not concealed” and here in the question the HMRC is prompting for disclosure from Sarah and the rate for “Deliberate not concealed and “Prompted disclosure is 35%. Hence its a direct rate.
Hi Sir,
I have watched your transfer pricing videos and i did read your previous post. For me logically it felt like the oppurtunity cost was just 16-1 because marginal cost has to be incurred anyways beacuse without making the product you cant sell it. Thats why i asked if marginal here means the additional cost of making a unit. Thats All!!!
I got it clear now. thanks for the help
Sir,
The oppurtunity cost of not being able to sell is 16(SP)- 1 (Savings of selling cost). My question is 8$ excluded because it is “marginal Cost “ie. since marginal cost means additional cost of producing 1 more unit. Since u are not going to produce one more unit of X ur excluding 8.
can u also tell me what happens if 8 was a variable cost instead of marginal cost?
Sorry ..it was typing error from my side. My question is shouldnt the answer be false because environmental costing uses not only one method of life cycling. It is one of the methods. There are actually more than one right?
Hi SIr,
For part B of the question you said that examiners report says”It is equally as acceptable to have treated the heat and power costs as variable and include them in the above. It will not have changed the outcome and is an entirely acceptable interpretation of the scenario.”. However in June 2018 revision kit statement its not mentioned.
But logically the heat and light & depreciation insurance cost are incurred specifically for the project and wont it therefore be relevant?Because to compare to costs of buying we need to incur those cost that arise as part of making the products right? so if we dont incur these cost wont the answer change?
Plus i believe the fixed cost incurred as machine cost should also be included coz in part A of the question we are assuming it as specific fixed cost?
Can u please help me here. and can u also let us know if we will get marks if we write an assumption stating that the above cost are assumed as specific so we are including it as part of variable cost?
thanks in advance