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Sir, u didnt understand me. Textbook says “we put/call options when we think that exchange rate will move against us. But this test says in your favor. Is that a misprint ? tell me 100 % rule pls. im confused
OMG got it because figure is on the right side its 1,7 $:£ ???? What a heck 🙂
Erin give me ur facebook or smth i ll send you very useful tests online that ive bought from Kaplan yesterday. Wish you all the best girls!
Rustam:)
so when its only perpetuity we dont need 2 IRRs at 2 different DF’s. Just NPV/IRR – initial investment=0 and calculate IRR from equation.
Thats right?
Noureen best of luck. I assume you know the thing but its just the Reading questions correctly. Get urself a marker and highlight every detail that Examiner gives as destruction/collusion. smth like Calculate and Discuss. You calculate but forget about discussing.
+Review Technical Articles but dont concentrate to much on them, they are too detailed.
+Review Past papers.
and hopefully all done.
There are several tricks in this paper but examiner said that was the hugest loop.I hope that u going to smash it dear:)
Aiming to get 60+ as i see nothing extraordinary in it. Just a bit of extra attention on tricks. Inshallahif asset is bought at the begin.of the year (or if said nothing assume by default) = the same timing as Tax on operating flows. (always)
Easy: If said tax payable/occurs immediately – T1 (same for TA depn)
If said tax payable/occurs 1 year in arears – T2 (same for TA depn)If said asset bought during/at the end of the tax year. Look for the timings. Its sepparate headache. But does happen very rarely.
Good luck
Rustam
3)Little question here sir:
Book value of Bank loan is 5300. And we need to calculate MV’s of whole debt.
in answers it says Use Book value for Bank loan. Isnt it discounted if its repaid in 10 years time?? In 10 years 5000 million is gonna be worth much less though? and under which Required Investors Return we need to discount it?
I used 5% interest for 10 years redeemable in 10 years time.under 5% K(d) discounting factors and ive got 5300!!! Is it coincidence??
sorry sir. Got it now. They gave Profit after tax having already deducted Interest but not showing it. I guess examiner test here on knowledge of Operating Profit less 1)first Interest 2)then Tax…SOOOO confusing though((:
2)If the Gearing is 0. Asset beta=Equity beta and equals 1? because there will be no other risks except the ones set by the market and the risk of the Business will be the same as Market riskiness. am i right? please check.
6) General question: For the investment appraisals, the higher the inflation the lower “discounting” effect the PV’s have. Am i right? so keeping interest rates low and keeping inflation is better for economies when growing. Why inflation is bad thing then?
1)so the higher interest the higher inflation is and lower exchange rate is ?
2)If the spot rate now is, say: dollar to pound=1.5, it says exchange rate. It means dollar to pound is 1.4 now? so Dollar became stronger ?
in questions like, if exchange rate has fallen, exports are stimulated and imports became cheaper im getting confused when they say exchange rate has fallen. I dont understand that means.
2)Purchasing power relation=Exchange rates depend on Inlfation Rates (PPP formula)
Interest rate relation=Exchange rates depend on Interest Rates (IRP formula)Is there a formula that combines the relation of Exchange rate with both Inflation and Interest rates?
whats the difference between forecasting and determining future rates? i mean between future and forward?
3)and im not quite sure about Interest Rates we use. If the Real Rate is given we should recalculate it to nominal value using Interest Parity Formula right? and use Nominal values only for calculations? i need to practice i know..:)
2) Operating cycle=Inv days + Rec days – Payable days
why not we adding cash? (isnt it the part of Working capital?)
Good morning sir.
1)When calculating Rec days do we include BAD debts into Receivables and Sales? SHould we exlude from both of them Cost +profit margin?
2)When calculating WIP/raw materials inventory days ; whats the cost of production? Is it only purchases?
Whats the cost of finished goods? Its WIP cost + purchases cost + work done to finish? i mean in the cost of finished goods there is already sitting purchase cost and WIP right?