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Q22 was about valuation basises:
Answers was:a) Net realisable value- when company has no intention to liquidate
b)…
c)…d) Replacement value when it is going to liquidate
@acca145 said:
Happens ?
But round diff would be less
I got negative balance in year 4 and 5
NPV = $63 mill roundsSurely i could only loses one mark for this? Hopefully still a pass
The question regarding interest derivatives. I chose a which was that swap of fixed and variable rates must be beneficial to both parties but it was a complete guess.
The one about the international Fisher effect and purchasing power parity. I chose that the Fisher effect statementioned was incorrect but purchasing power parity was right. Again a guess.
The saving or cost of leading was option a I believe. Around 97k if I remember correctly.
B
B
B
C
A
A
A
B
C
B
B
B
B
A
B
C
B
D
A
A
C
B
D
B
D
B
C
A
B
A
MOST OF THEM WERE GUESSESYeap, i might be wrong about irredeemable or pref. share. But i am 100% confident in the absence of any taxes )))))
@louiseabigail said:
11.6% for wacc and 61,385,000 for the npv. I took the remaining balance as a tax shield in year 411.6 approx wacc and npv was lil higher than that i guess. Tax and dep allowance must be taken to year 5
Multiple choice question with 40% taking the 2% discount paying in 15 days. I went with d something like 168k
Also the mcq with the buffer stock. I had 412k
@louiseabigail said:
Multiple choice question with 40% taking the 2% discount paying in 15 days. I went with d something like 168kAlso the mcq with the buffer stock. I had 412k
2% discount? Yea option D . Not sure about buffer stock. How about equity beta and fra? I got 1.16 for equity beta and 37500 for fra
@acca145 said:
What about capital rationing? I think that was small point for 10 marks…I wrote a page and a half on capital rational about hard and soft rationing. About related projects. About captionrationing being out of their control ie they dont have enough to finace the projects. About profitability index and divisible projects and choosing the best schedule
@surajnair said:
2% discount? Yea option D . Not sure about buffer stock. How about equity beta and fra? I got 1.16 for equity beta and 37500 for fraSame for fra. Complete blank on the beta question so i guessed
@mrampersad said:
What in the hell was “optimal investment schedule”????Project divisibility and stuff
For optimal capital structure i wrote about modigig and miller after tax theory about gearing ect.
For MCQ, one question regarding the advice to engineer on using which beta rate, the question given beta and DE ratio, what should we do on that ?
@surajnair said:
2% discount? Yea option D . Not sure about buffer stock. How about equity beta and fra? I got 1.16 for equity beta and 37500 for fraHow did you calculate the fra?
1A
2C
3B
4A
5C
6C
7B
8B
9D
10C
11C
12A
13D
14C
15B
16C
17B
18D
19B
20A
21B
22A
23A
24A
25D
26A
27C
28A
29D
30BFor 31a something around 11.6 or nearly 12%, for 32a 63,308 positive
First time I took the CBE but does anyone know if section C of the written and computer exam questions are different?
The NPV you guys are getting at $63 million is way off mine – my figures given in the question were not this big.
Hi guys! How about questions related to account receivables after 2% discount? Anyone remember? I got $1.648 m so it was option D. The same with average inventory level – i got $412 m – option C. But i was not pretty sure about my calculations… for 31 i have not even tried…
I had a cost of equity of 12.1%
For the 7% loan note I had a cost of equity of 7.1%
Bank loan had a cost of equity of 8.5%I had a cost of equity of 12.1%
For the 7% loan note I had a cost of equity of 7.1%
Bank loan had a cost of equity of 8.5%
And a WACC of 11.8% if am not mistaken.@acca145 said:
It was asset based valuation and Its answer was total assets less total liabilities, I think bI too had a negative balance for year 4 and 5
But I can’t recall my exact NPV
I think it was +ve sixty something millionEasy exam i think.
31, WACC= 12.68%
b
I merely just spoke about the 4 structures approaches (traditional, both M&M, and pecking order), and explained how they try to achieve the optimum capital structure aka, where WACC is lowest, wasn’t quite sure what else they were asking.32. NPV: 63.3m i think
b
simply explained what the term meant, the types of rationing, hard/soft. Explained the purpose of NPV in relation to shareholder wealth, then talked about profitability index and use of combination for indivisble projects.Out of the multiple choice, think I got around 20/30, the rest were more or less guesses.
Arif,
I think you’re right on the way incorporating the inflation, that’s exactly how we should do it.On that note, Q 32a I can’t quite remember was actually selling price and variable price the same (in current term, not incorporating inflation) all of the four year? If it was not I may have given wrong answer just bacause I didn’t look at the question carefully ???
Can anyone clarify this?
Arif,
I think you’re right on the way incorporating the inflation, that’s exactly how we should do it.On that note, Q 32a I can’t quite remember was actually selling price and variable price the same (in current term, not incorporating inflation) all of the four year? If it was not I may have given wrong answer just bacause I didn’t look at the question carefully ???
Can anyone clarify this?
@mdarifansary16 said:
Question 31: are we supposed to include the cost of bank overdraft in the WACC calculation??????????Question 32: what should be done with variable cost inflation which was $52 every year? Are we suppose to do variable cost as 52*1.03 in year, 1 52*1.03*1.03 in year 2, 1 52*1.03*1.03*1.03 in year 3 & 52*1.03*1.03*1.03*1.03 in year 4? or something else????????
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What was the answer of the mcq regarding fiscal policy???
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