*** ACCA F9 December 2016 Exam was.. Instant Poll and comments ***

hi, does anybody remember about mcq answers?

production capacity is 850 000 unit per year.
Investment cost is 3 200 000 $.
unit price is 3.1 $ (with 3 % inflaton)
variable cost per un it is 1.1 $ (with 6 % inflation)
Fixed costs are: 110 000, 205 000, 330 000 and 330 000 $
After tax cost of equity is 10%
corporate tax is 20%
reducing balance dep. rate is 25%
Depreciation tax allowance could be claimed at the START of first year

Calculate NPV and comment on acceptability

NPV so tax saving start @ year 1 while tax payable start @ year 2 ?

Who got each of around 10.58
and what was npv

@pinkyjovin123 said:
Hi

1st answer in Mcqs is it obsolete inventory items reduced,(JIT)

4th q. Is it P/E ratio is the reciprocal of earnings yield

Yes P/E ratio is reciprocal of Earnings Yield.

Btw tax depreciation benefit was in Year One or Year Two?

@caspian087 said:
production capacity is 850 000 unit per year.
Investment cost is 3 200 000 $.
unit price is 3.1 $ (with 3 % inflaton)
variable cost per un it is 1.1 $ (with 6 % inflation)
Fixed costs are: 110 000, 205 000, 330 000 and 330 000 $
After tax cost of equity is 10%
corporate tax is 20%
reducing balance dep. rate is 25%
Depreciation tax allowance could be claimed at the START of first year

Calculate NPV and comment on acceptability

Sure benefit was for first year?

I got a wacc of 10.6^.^

My npv was a positive. It was 12333 somethingg…

i got wacc 10.8. we had to calculate equity , bank loan , preference and loan notes right? all 4? or just 3? i did all 4

@madihakhan18 said:
I guess in yr 0 cs it was at the star of yr 1 that means end of yr 0

It only mentioned that expenditure it made on start of T0. That was very confusing

I exactly got the same wacc too!

I think I got 11% cost of equity, 9.1% cost of preference shares, 5.6% cost or redeemed debt. Can’t remember the bank loan. WACC was around 10.6 I think.