[learner93]

Does it mean that to discuss the appropriateness of cost driver is to identify the appropriate cost driver? Because i thought to discuss is to state arguments for and against.

The effect stated is fixed cost effect?

[learner93]

Sir kindly guide me on the above matter. Thanks.

[learner93]

Hi sir is there a difference between business process reengineering and business process redesign?

[learner93]

Hi sir can u explain to me why brand recognition is external csf? From my understanding, brand is a controllable factor by a company(either by good marketing techniques or quality goods) so could brand recognition be internal csf instead?

Thank you in advance.

[learner93]

Sir why in this question in bpp kit, savings in advertising costs is not a relevant cash flow?

[learner93]

Sir can explain to me the meaning of part v requirement and how do we suppose to answer it?

[learner93]

Does this mean that the operating lease in eva is only meant for machinery and not property?

[learner93]

Sir is operating lease equivalent to rental payments for property? If yes then why in this question 1 rental costs is not added back to nopat?

[learner93]

I see, thank you so much sir 🙂

[learner93]

In this ques they said the $4mil sale value was after taking any taxation impact into account. Then why do they include balancing charge?

[learner93]

Then does tax on profit/loss on sale of asset i.e balancing charge or allowance included as the tax impact? Coz i saw some ques do not include balancing allowance in cash flow calculation but in some ques it is included.(when it is stated that the scrap value is after-tax)

[learner93]

Sir in one of the note of this ques is the taxation impact on the scrap value referring to the cap gains tax? And is this the same as after-tax realisable value?

“Of this, $16 million relates to plant and machinery, which is expected to be sold for $4 million when the project ceases, after taking any taxation and inflation impact into account.”

[learner93]

Sir can explain the meaning of this assumption?

It is assumed that the value of the land and buildings at the end of the project is a relevant cost, as it is equivalent to an opportunity benefit, even if the land and buildings are retained by Chmura Co.

[learner93]

Just to confirm, does this mean for eg like the govt wanted to reduce electricity/water consumption so they increase charge on these, and the increased costs of electricity and water are environmental-driven cost?

[learner93]

Hi sir can explain to me the meaning of joint environmental cost centre below? Does environmental related costs mean specific overhead?

ABC applied to environmental costs distinguishes between environment-related costs and environment-driven costs. The former are attributed to joint environmental cost centres, for example incinerators or sewage plants. The latter are hidden in the general overheads and do not relate directly to a joint environmental cost centre, e.g. increased depreciation or higher cost of staff. 

[learner93]

Thank you so much sir 🙂

[learner93]

This only happen for the starting issue price right? Afterthat the share price of subsi should be based on its own performance?

[learner93]

Oh i see, does this mean that if lanosia’s mkt efficiency is weak then the subsi’s share price will be based more on kilenc’s share price or..?

And dark pool is said to reduce mkt liquidity, is this mkt liquidity refering to due to less trading in normal stock exchanges the shares in the normal stock exchange is less liquid?

[learner93]

Sir i don’t understand the last para of this part b answer, does it mean that when a parent co is effectively controlling a subsi the subsi’s share price would be affected only by the parent co’s share price?

And the sentence mkt efficiency in general in Lanosia would probably be much more important, is it because to ensure the ipo in lanosia is priced correctly?

This two sentence in last para seems to be contradicting each other to me.

[learner93]

Oh i see. Thank you so much sir! 🙂

[learner93]

Since asset beta excludes the effect of gearing then shouldn’t it be weighted by only equity? (When both co is debt+equity financed)

I am slightly confused here because in bpp textbook one example used only equity (1,100 and 156) as weightage to calculate combined asset beta. The acquirer has 50mil shares with current mkt value of $22 each and debt $60mil; the acquiree has 65mil shares with a total current mkt value of $156 mil and debt $12.5mil to be taken over by the acquirer.

[learner93]

Sir does this means that it is acceptable to assume that the fcf is reinvested at cost of capital i.e 12.5% instead of 4.5% as calculated by the examiner?

And does this mean we can use pv at yr 0 to calculate the pv of return phase and pv of investment phase as per the formula given in exam?

[learner93]

Sir, if i use only equity as weightage to calculate the combined asset beta would it be acceptable? Because i thought asset beta is only affected by equity. Thank you in advance 🙂

[learner93]

Sir, lets say we are having non conventional cash flow in a project, say
yr 0 1000 outflow
yr 1 and 2 1500 inflow
yr 3 500 outflow
should the yr 3 500 outflow under investment phase or return phase?

[learner93]

Sir in this question why did they use capital employed at year end to calculate EVA? Shoudn’t it be using cap employed beginning of the year?

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