*** ACCA F9 December 2017 Exam was.. Instant Poll and comments ***

@coralienana said:
Yes i know 10 years was requiring a lot of calculation for the time we had and the marks allocated … That’s true …

I have myself screwed up pretty bad but it was 1,2,3,4 and 5-10 years
5-10 was cumulative in every sense of the word. Also, dep was linear so no prob.

What about the roce and mcq 1 receivables for the year or avg receivables question ask the receivables not avg receivables

@ali17 said:
What about the roce and mcq 1 receivables for the year or avg receivables question ask the receivables not avg receivables

I wondered that as well but I presumed it wanted us to use the average receivables, as average receivables gives a figure which is more representative of the year so that’s what I went with.

@coralienana said:
If i understand you correctly someone who did 4 years and had a residual value ; that’s OK ?

Yes that’s correct! The question itself mentioned linear dep, which never leaves a residual value and is proportionately spread over the effective economical life of the asset.

I think the last question was something like discuss the reasons for conflict among stakeholders, it was 6 marks which was same marks as one of the npvs?

@ali17 said:
Could you please let me know that in pay back question where was the discount factor in that question the discount factor was given in npv part not in pay back and roce question part

we use the same disc factor. its not different for npv or disc.payback

@hsnkzmi said:
That’s cause you had to spread it over 10 years, that was also mentioned in the q. So, all calc for 4 years are 100% wrong, cause then you’d get a residual value and the q mentions complete dep to value 0

Hi firend, I did it for 10 years, do you think that it is correct?
Because With ignoring the years 5-10 you can not calculate them by multiplying by annuity factor because of inflation. I calculated 1-10 years with nominal rate with inflation (with 1250 Tax allowed dep) and with 6%(real rate) without inflating the figures. Got arounf 84K with nominal and around 70K with real rate.

Besides did anybody remember with what doscount percent we have to fidn a doscount factor for debt in WACC question(I guess it was q31)? I used 5% and 7% for finding it in valuation of debt.

Why I cannot to reply to the comments? I press reply but the comment area is empty..

I’m not sure if my original question has caused confusion. I know the premises was depreciated over 10 years with 0 scrap value, (50m/10*25% = 1.25m a year allowance). I was unsure to the amount of years the DCF should have actually been for, I did 1,2,3,4,5-10.

@aagshin said:

@hsnkzmi said:
That’s cause you had to spread it over 10 years, that was also mentioned in the q. So, all calc for 4 years are 100% wrong, cause then you’d get a residual value and the q mentions complete dep to value 0

Hi firend, I did it for 10 years, do you think that it is correct?
Because With ignoring the years 5-10 you can not calculate them by multiplying by annuity factor because of inflation. I calculated 1-10 years with nominal rate with inflation (with 1250 Tax allowed dep) and with 6%(real rate) without inflating the figures. Got arounf 84K with nominal and around 70K with real rate.

Besides did anybody remember with what doscount percent we have to fidn a doscount factor for debt in WACC question(I guess it was q31)? I used 5% and 7% for finding it in valuation of debt.

Prima facie it looks good.Although each of us gets different answers its really your grip of the concept that matters.

@lukman94 said:
How are they wrong lol ? The Text clearly said the Scrap value was zero. If you look at previous exams where depreciation has been on a straight line basis you simple take the initial investment over the assets useful life multiplied by the tax rate. This gives you the tax relief per year. It was a fairly simple question that many people are over complicating.

Thats’s cause their perception of cash flows from a project is wrong. The question specifically said that from 5th year on wards the production will carry-on at 200,000 U’s an year. How can you end the question at 4 years , when in reality it does carry on for a longer period? how can you just take cf’s upto 4 years and not any further? the periods were as follows – 0,1,2,3,4,5-10
lol

@hsnkzmi said:
I understood your question but i have no idea …
I also asked on the forum to have an idea because i’m still confused …

Cf’s will be taken for the years 0,1,2,3,4,5-10 . From 5-10 years there were same cf’s and a cumulative disc rt might as well be used.

I think the CF after the year 5 will not be the same because of inflation factor. If you are talking about real rates you are right. Am I right?

@donmako said:
My choice was also cash – I was hesitating between sales and cash but i looked at the formula of cash flow cycle and the sales is an element of counting receivables days. So for me is cash.

What do you think guys ?

on the basis that the question deals with working capital but not any “cycles”, i have chosen sales.

“Working capital is a measure of both a company’s efficiency and its short-term financial health. Working capital is calculated as:

Working Capital = Current Assets – Current Liabilities”

sales do not comprise either ca or cl, it is an element of the statement of profit or loss. my logic was based on the assumption that in case you do not have enough cash to repay current liabilities you will have problems. moreover, if all your sales are financed out of long-term debt, you do not care about wc at all.