[Ibrahim]

I am now an ACCA affiliate passed P3 with 66% and I never failed ACCA Exams. my highest scores, F9 Financial Management 85% and Financial Reporting 84% , my lowest scores, Advanced Financial Management 56% and Performance Management 60%

[Ibrahim]

Alhamdulillah! passed with 62, first attempt.

[Ibrahim]

got 69 first attempt. Thanks OT and Kieran Maguire

[Ibrahim]

in p2 link on this website, there is link of resource,titled Technical Article on it there is an article titled complex groups.
thanks

[Ibrahim]

Hi John, pls, on this same topic, in examiner`s answer Q1 june, 2014 and Q2 december, 2014.
to calculate the overall benefits examiner used the difference between total fixed rates and total floating rates but in the Technical Article, currency swap he difference was added. I thought it should be

3.6% 4.5% =0.9%
E+1.5% E+0.8% =0.7%
overall gain =0.2%

but instead, the difference was added as 1.6%.
pls clarify

[Ibrahim]

I can see why u always say in p4 you are unlikely to arrive at the exact answer.
Thanks

[Ibrahim]

Hi John, the point I want to make is, why do we use 47.6 to find terminal value which is after deducting additional capital investment because part of question says,” the company will require an additional investment in assets of 30c per $1 increase in sales revenue for the next four years”.so, that means after four years that investment is not required, therefore, free cash flow for terminal value calculation should be: 78-19.5=58.5 not 47.6.
Pls clarify. Thanks

[Ibrahim]

value of spinning off department B
$m
PBDIT (40% X 37.40) 14.96
-) attirbutable to department C ( 10% X 14.96) =(1.50)
-) tax allowable depreciation (98.2 X 40% X 10%) =(3.93)
PBIT 9.53
-) tax @ 20% =(1.91)
FCF 7.62

my question is why TAD was deducted before calculating tax. i thought it should be deducted after tax

[Ibrahim]

What a relief! Thanks

[Ibrahim]

Hello John, am I right to say that, if future spot rate is not given in currency option question, convert the underlying transaction at the exercise price to show the worst that could happen.thanks

[Ibrahim]

OK.thanks

[Ibrahim]

pls, in this type of question of march/june 2016. can I still get full credit if i use mid market value where relevant so that i won`t bother my self from which is buy or sale rate? thanks

[Ibrahim]

No, I don’t mean that sir, may be I did not put it right.what I mean is buy call at 96.50 and and sell put at 97 instead of buy call at 97 and sell 96.50 as written by the examiner. Does the choice of which exercise price to buy call which to sell put matter? Thanks

[Ibrahim]

Thanks and that means in sep/dec 2015 exam i wont lose any mark if choose opposite of the exercise prices the the examiner used for call and put option ?

[Ibrahim]

please, sir for a interest rate collars,my understanding is that if we are investing money, we buy call option at on exercise price and sell put option at another exercise price. pls,
1.does it matter which strike price we choose to buy call or sell put option?
2-if yes how are we to go about it.
thanks

[Ibrahim]

HI. is there an alternative way of calculating the percentage fall in the selling price that would need to occur before the NPV falls to zero.the examiner`s answer is not logical for me to grasp.thanks

[Ibrahim]

thanks

[Ibrahim]

ok thanks

[Ibrahim]

Hi john, pls help me out. Annual subsidy benefit = $42,970,000 x 60% x 0·025 x 80%=515.64
my question is why 80% is included in the above calculation.
is it because subsidy benefit are calculated net of tax since the tax rate is 20%. thanks

[Ibrahim]

I watched all your P4 lectures sir and I really got the point now.

[Ibrahim]

ok thanks

[Ibrahim]

yes, the reason why i asked that question is because of the statement you made that “Everything the examiner did was correct except that he should have used the difference between the actual rate and the FRA rate (rather than the difference between Libor and the FRA rate).” pls if possible give a hint arithmetically how it should be. thanks

[Ibrahim]

as suggested , if we use actual rate and the FRA rate as the difference, payment to voblaka bank when interest increase to 4.99 will be (4.79%-4.82%)*$48m*4/12=$4800.if we deduct it from investment return at 4.79% that is $766,400-$4800=$761,600
Effective annual interest rate =$761,600/$48m*12/4=4.76%. is that correct, pls help me with alternative solution if iam wrong

[Ibrahim]

so the statement does affect FRA rate.thanks

[Ibrahim]

thanks,i got this one.by the way, the question also says, Awan co can invest funds at the relevant inter-bank less 20 basis point. does this statement affect FRA rate of 4.82% as I can see from the answer to the question the effective annual interest rate is 4.62% instead of 4.82%. is there any thing i am missing? thanks

[Author]

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