[thuongph17029]

passed 54%, second attemp last attemp 49% for self-study! Im so happy

[thuongph17029]

49/50

[thuongph17029]

Hi all,
Below is my calculation for NPV section, could you have a look at that. For depreciation (paid at the Start of first year so I added it back in yer 0)
Depreciation
Year 0 1 2 3 4
Beginning balance 3,200,000 2,400,000 1,800,000 1,350,000 1,012,500
Depreciation -800,000 -600,000 -450,000 -337,500 -1,012,500

0 1 2 3 4 5
Sales – 2,714,050 2,795,472 2,879,336 2,965,716
Variable cost – -991,100 -1,050,566 -1,113,600 -1,180,416
Contribution – 1,722,950 1,744,906 1,765,736 1,785,300
Fixed cost – -110,000 -205,000 -330,000 -330,000
Profit before tax – 1,612,950 1,539,906 1,435,736 1,455,300
Initial investment -3,200,000
Tax expense 0 0 -322,590.0 -307,981.1 -287,147.1 -291,060.0
Depreciation 800,000 600,000 450,000 337,500 1,012,500 –
Tax benefit 0 0 120,000.0 90,000.0 67,500.0 202,500.0
Net cash-flow -2,400,000 1,612,950 1,337,316 1,217,755 1,235,653 -88,560
Discount factor 1 0.909 0.826 0.751 0.683 0.621
Present value -2,400,000 1,466,318 1,105,219 914,917 843,967 -54,989

NPV 1,875,433

[thuongph17029]

@trishee said:
We had options of probability analysis, sensitivity analysis, simulation … so there’s that! And treasury bills are issued by the government and thus they are risk free 🙂
Idk why people are worried, we shall pass!! :):)

Yeah, hope we all pass this exam

[thuongph17029]

@pinkyjovin123 said:
In q no.32 two types of risk ???

What was its answer??

I go for sensitivity analysis and simulation. Hope that I was right

[thuongph17029]

@kbourne said:
Can anyone tell me for the WACC question, what number you used for risk free rate of return in the CAPM, when calculating Ke? And also what discount factor was used when generating the redeemable bonds? I used that weird 4% treasury bill option as I couldn’t see any other option.

I used treasury bill as risk free rate as normal I have dealt with this many time, the cost of equity is 11%. Dont worry about this

[thuongph17029]

Explain the term business risk and financial risk (4 marks)
Key features of right issue as the way of raising equity finance (5 marks)

[thuongph17029]

Hello all,

I have the below concern regarding to taxable depreciation 25% declining balance, which you can assume to be paid at the START of first year of operation? NPV Calculation uses end of year cashflow? Thus, I add back 800k (1st depreciation ) to year 0 to initial investment? Am I wrong? For WACC I got about 10.6 something. Optimum investment NPV: 13.3m

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