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So if you apply for a job, as an ACCA member can you say your highest level of education is Masters level (if you don’t actually have any other Masters degree) – for example in the USA?

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@keyboard said:
and for going concern since manufacturing site had had a hit… it was a adjusting event too being a going concern event!…

well, if you’re not sure about this, open up f7 kaplan book and read topic ‘going concern’ under IAS 10 chapter…

good luck everybody..god bless

It might be a going concern issue AFTER year end, however I was under the impression that because it doesn’t have to do with the current year end being reported on, it wouldn’t require an adjustment, only disclosure. There were no indications the site had any problems before year end…

Adjusting event:
An event after the reporting period that provides further evidence of conditions that existed at the end of the reporting period, including an event that indicates that the going concern assumption in relation to the whole or part of the enterprise is not appropriate.

Not sure if that’s right though, just my thoughts..

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How many professional marks might you get if you did the introduction and headings and title but forgot the conclusion? So pressed for time!

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Hi Mike,

Thanks very much for your reply! I’ll definitely have a look and compare the June 2014 exam to see if I can spot anything.

Thanks again 🙂

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The past papers answers provided by ACCA are so detailed. Do our answers have to be at that level of detail as well? I did as many as I could and but there just doesn’t seem to be enough time to put so much down.

I thought overall the exam was fair..tricky..but fair. Good luck to everyone!

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Thanks so much for your reply! 🙂

Will definitely go for P5 I think…

Thanks again!

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The exam seemed pretty fair..i was definitely expecting the bribery act to come up but funny enough it didnt..i ran out of time though which doesnt seem to great..doesanyone know if the markers check answers in bullet points..or do they just give u big 0 for those lol

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Up til now Ive used the BPP Study Texts for the exams but this time I ended up using Kaplan instead. I was really disappointed with the Kaplan 2009-2010 F7 Study Text. It was full of errors, the examples and working were completely different from the exam workings, and basically the overall clarity of the text just wasnt up to standard. I havent seen BPP version but Im pretty sure it must be clearer than the Kaplan one. If I have to repeat any of the papers I did this session, I think I will switch back to BPP if I can find the books here….
Anyone else have the same opinion about the Kaplan text?

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@happytbaby said:

Quote:

For the Idiot trainnee question, I think the NPV was quite high , I got something that I cant remember but had the impression that the return was like lottery.lots of laughs………guess we must have been right.
the second part of the question was a blessing for me……….
1 Assets with different lifecyle….issue is comparism of costs.so u use Equivalent Annual Cost which is equal to PV of cost divided by teh annuity factor. The annuity factor would take the lifecyle into consideration and make the costs comparable.
2. Projects with different IRR…………u use NPV, that its main superiority over IRR . Just discount at teh firms cost of capital instead of looking for their internal rate of return, just check that the project will increase the wealth of the firm.
3. Project with different risk………u cannot use WACC to discout thus u need to find the beta of a firm in the same industry as the project u are diversifying into, ungear the beta by using the Beta asset formula, regear the beta to reflect the gearing of the firm and teh calculate the cost of equity with CAPM , u can then calculate the WACC and then appraise the project.
I guess EAC wasnt well answered last diet, that is why Tony Head tested it again.

I saw some other posts on this thread saying they also got alarmingly high NPVs so I think we are all in the same boat..I have to admit though, when I saw my answer in the exam I was tempted to laugh coz it just looked ridiculous. I was 120% sure I messed up the calculations somewhere along the line lol..
I agree, the NPV question was interesting. After seeing your points Im kind of relieved now. I managed to get those three points down, but because I left that part of the question till the end I didnt really elaborate much on them. I mentioned the EAC and the formula, using WACC instead of IRR(s) and ungearing and regearing the asset beta. I just hope I can get a few marks in there 🙂
When I left the exam I was really disheartened, but now that I see some of the other peoples answers are similar, a little ray of hope is shinning through all those black clouds..Im really really paying for a 50 at least..Why do the results have to take so long!!!

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@mrash

I think the question stated that the company had already recorded the share issue so the share premium and everything was already in the financial statements presented. Which would mean you probably dont have to add the 19,800 to the existing share premium (I think…Plus considering the fact that the two amounts are the same – but you never know with the examiner, might just be trying to confuse us). I didnt add it, I could be wrong though..

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sounds about right..i had left those two for the end too..since you’re not the only one who got that answer there’s a pretty good chance what you did was right 🙂

i wish i had thought of that…

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@1686844 said:
I got the same percentages 🙂

how???

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@louibee said:
arggghhhh good god that was the worst f9 paper i have ever sat and after sitting 3 you think i should be a pro! 🙁

for the DVM the first part i calculated the growth before which is current div / old div to the power of 1/no of movements which gave a 4% growth and $7. something then the second used the 70cents and then 3% growth and it gave me $10 something.

Can anyone remember what the last part of question 2 and 3 was?

Ta

Thw Wacc i got 11

I got around $10.40 if i remember correctly..using the historical data and around $10.60 using the DVM..but I thought $10 seemed like a bit much..still confused :S

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@decentguy185 said:
In the last part where we had to calculate share price on DVM.. I think that dvm assumes that dividends will be paid in perpetuity…. so, i dont get that 3 years without dividend part and how to calculate share price on dvm.. i dont know what i did but i got $5.8sp.
i got probability of 20% on q1 a{iii}.. and 18% on a{iv}

Would anyone please tell me whether the interest payments and tax savings on interest should have been included in the NPV calculation!!!

how did you calculate those probabilities? I was totally clueless about those..
I didnt include the interest payments because i think in NPV we assume that Interest is included when the WACC is used (coz the WACC already takes into considereation the interset on debt??)…Not sure if thats right though..

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@fundamental said:
I had to do Q3 twice because I messed up the first time lol
I got an NPV > 2000

Thought it made sense after adding back all of the nonsense that the trainee put in but I was still a bit iffy on having a return over 100% invested.Anyone else get anything stupidly high?

ya I got something ridiculously high too..I was like what the…but i didnt have enough time to go and check through so i just assumed it was all right….glad to see im not the only one..

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Q1 – I got the closing account balances for period 1 and 2 that was pretty straightforward i think..but then the other two questions about calculating the probability of a negative account balance and calculate the probability that the account balance will exceed the overdraft limit or something (i dont remember it properly) those confused me so i skipped them..then there was a that part about trade receivables management policy. In that question I just waffled on about how they should assess the credit worthiness of customers and the usual debt collection procedures they should adopt…the last part of the question was about the importance of liquidity and profitability in working capital management and i wrote that a company need to strike a balance between the two…I was surprised at the 13 marks for the EV calculation..Didnt feel like it was worth 13 marks lol..
Q2 – Um..this question didn’t seem two difficult but it was a bit confusing. I calculated the after-tax cost of debt. Then we were so supposed to explain the effect the bonds issue had on the WACC..i wasn’t sure if the WACC should be calculated using the book value of the overdraft (4.5m) or were we supposed to use the new limit on overdraft 500,000? Anyone have any ideas? Or how did you people solve it? So yeah that part confused me a bit. The other part was interest cover and gearing if I remember correctly..I calculated the interest cover before the bond issue and after the bond issue and then compared them both the the sector avg. Same thing for gearing…Hmm I think that was it right? I dont remember the rest of the question…
Q3 – The trainee was quite retarded obviously 😛 included depreciation, didnt adjust for inflation rates..part of the fixed costs were already committed (therefore irrelevant)..used a DF of 10% instead of the WACC..The one thing I wasnt sure of was was the mentioned the REAL rate of WACC and then they also mentioned the rate of general inflation..I calculated the nominal rate of WACC using the formula (1+1)=(1+h) x (1+r)..but I’m not sure if i was supposed to or if we were just supposed to use the given WACC..anyway after using that formula I got a rate of appx. 12% so I used that..but my NPV was was too high to be true lol..I think i mightve messed up the calculationgs somewhere. Overall though the answer seems to be that the NPV is actually positive and the project should be accepted…The other part of the question about how to overcome certain difficulties in project appraisal (different asset life cycles, several IRRs, business risk), I kinda just guessed..wrote whatever came to my mind..again alot of points for that part, unfortunately 🙁
Q4 – While doing past papers I never felt the need for more time..3 hrs was basically enough to finish all the questions and review my answers but during the exam I found myself under a bit of time pressure when I got to Q4..I didnt really answer it as well as i probably couldve if I had more time..Used the formula for TSR and dividend yield is pretty easy to calculate..i forgot to caluculate capital gain though..oh well…and the rest of the question I answered what I could in the 15-20min I had left so yeah..I think Q4 was kind of a lost cause…..
Anyway..overall I was disappointed with the paper..It was so totally different from the usual question types..I bet even if we could solve all the past papers without any problem – like totally mastered them – we still wouldnt have been prepared to answer the questions on this exam..it was just so different. I just hope I get a 50. I dont think anyone is looking forward to taking this paper again..good luck to you all 🙂

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