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Which answer are you looking at?
Look at the ACCA answer which you can locate
ACCA March/June 2018 Sample Answers
Go to ACCA, look for exam papers and look at /fm-2018-marjun-hybrid-a.pdfSo
It’s the 2 million in debt at 8% which gives 160(000)So its raising either debt or equity for 2 million
Through 8% loan notes .. so the extra interest is 2m * 8% = 160,000I cannot see 6%?
I do not fully understand your question
I believe that If you include the finance cost in the holding cost, the holding cost will be different, which will affect the EOQ calculation..
This question is different from others because it involves a payment obligation in euros, requiring the company to convert its dollars to euros. In contrast, in typical import scenarios where the company is converting euros to dollars, the lower buying rate would be used.
If a company is converting foreign currency into its own currency (like in import scenarios), it typically uses the lower buying rate.
This distinction is crucial because it reflects the nature of the transaction: the US company is purchasing euros to pay the European company, hence the use of the higher rate.To calculate the equivalent US dollar value of the payment using a money market hedge, the company would first determine the amount it needs to deposit today to cover the future payment, considering the interest rates in both regions.
The calculation would involve borrowing in the US and investing in Europe to manage the currency risk effectively.https://opentuition.com/acca/fm/sources-of-finance-equity-acca-financial-management-fm/
You should find this useful
When you outsource, you are transferring the responsibility of that activity to an external provider who specialises in it. Allowing you to focus on core activities and strategic priorities, thereby optimising the use of your internal resources.
If you were to perform the activity internally, then there is a risk that your resources may not be fully utilised, if demand fluctuates or if the activity is not a core competency.
By outsourcing, you can avoid the costs associated with maintaining excess capacity for activities that may not be consistently needed, thus reducing the risk of under-utilisation.It states that Wallace customers take 60 days to pay in the first paragraph then it says that
Wallace Co is considering offering an early settlement discount of 1% for payment in 30 days. It is expected that 25% of its customers (representing 35% of the annual credit sales figures) will pay in 30 days in order to obtain the discount.So that means 35% or 0.35 of customers take 30 and the rest take 60 which is 0.65 or 65% (bal fig)
Indivisible means you can only do 100% of projects
Divisible means that you can do proportionsYes, with divisible you calculate the PI index and use all the funds up, on a ranking basis highest first etc
Indivisible you look at the best combinations of using the funds, often not entirely. if you had a 100
* Proj 2 & 3 use 80 npv of 11 *
Proj 3 & 1 use 90 npv of 10
Proj 1 & 4 use 100 npv of 9
proj 2 & 4 use 90 npv of 10Relevant costs are indeed costs that are directly relevant to a particular decision and are expected to differ between alternatives, affecting cash flows. On the other hand, irrelevant costs are those that do not impact cash flows, such as sunk costs.
It is not necessary to memorise cflow in detail, but understanding the components and how they relate to relevant and irrelevant costs is important for investment appraisal.
Labour is already employed and being paid, the key consideration is whether the cost is incremental or not.
So the existing labour cost of $7 per hour is indeed a sunk cost, as it will be incurred regardless of whether the labour is redirected to the new project or continues with the current work.
However, when labour is diverted to a new project, the relevant cost includes both the lost contribution from the existing work and the labour cost, because the labour is still being paid.
600 hours × (7+3) = $6,000.The relevant cost is thus the sum of the lost contribution and the labour cost, as both contribute to the financial implications of the decision.
Cash paid to supplier which is 130690
Is 70% of payables so 186700 * 0.7 it says “ Pangli Co plans to pay 70% of trade payables in January 20X7 “The Cash received from customers is Nov = 40% which is 0.4 * 270,875 (as 40% paid the month after the month after because it says “ while the remaining customers take an additional month of credit”).
Then add Dec which is 60% which is 0.6 * 300,000 (paid in the month after).Hope that this helps
On a recourse basis, the company retains the risk of bad debts.
If the customer fails to pay, the company must buy back the unpaid invoices from the factor, meaning they still suffer from any irrecoverable debts.On non-recourse basis means that the factor assumes the risk of bad debts. If the customer does not pay, the factor cannot claim the amount from the company, allowing the company to save on all current irrecoverable debts. Thus, non-recourse factoring provides more protection to the company against bad debts.
In the ACCA exams, for Sections A and B, you will answer multiple-choice questions by clicking on the correct choice.
You are not required to write out your workings for these sections, as they are not reviewed by the marker.However, you will have paper available to do your workings if you wish.
For Section C, you will type your answers using a word processor or spreadsheet that is built into the exam.
That’s a very difficult question to answer
It’s a huge task for any student
I cannot advise you other than saying you will have to work extremely hard.
Watch all videos, go through the notes and practice questions.Wow that’s lovely to hear
I am so pleased to hear you have passed with such a great score 77%
That’s a fantastic accomplishment, all your hard work paid off.
Of course I don’t mind you linking with me on LinkedIn.The total production cost of each product is likely to change due to the more accurate allocation of overhead costs based on the actual activities that drive those costs, leading to a better understanding of the true costs associated with each product.
Introducing ABC will not reduce costs in the short term because certain costs, particularly fixed costs, remain unchanged regardless of production levels in the short run.
Say, rent for a manufacturing facility and this cost does not vary with the level of production; it remains constant over a specific period, such as a lease term.
In the short term, even if a company implements ABC, it will still incur the same rent expense.
Therefore, while ABC may help identify inefficiencies and lead to cost reductions in the long term by optimising operations and resource allocation, any immediate cost savings from fixed costs are not achievable. The potential for reducing fixed costs typically arises from long-term changes in operations or business strategy, rather than immediate adjustments.
Where is this question from?
So I can take a look at it
Make sure it is FM standard?
