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@delamanisp said:
For Q32, I think we had to take the cost of debt. The project would be financed solely by loan notes, meaning that WACC would not be a sufficient method, since no equity finance was used. I got around 2.3m NPV.I completely missed the part that was only financed by debt… how many marks missed do you think? A couple?
i found mcqs too tricky there were hardly 3 to 4 mcq on calculation in section A rest was all theory…!! and tooo many mcq from currency and interest rate risk…:(
did anyone found the same..?cant quite remember..
i did a cash budget and listed all the cash movements and the added it to overdraft at start of jan 20×7.. don’t know if that is correct or could have been simplified by using the cash operating cycle
@usmanhassan94 said:
dont exactly remember but i added the change(the change was 61500 i think) which i calculated in part b to given overdraft what was the value given in the question of overdraft..?cant quite remember..
i did a cash budget and listed all the cash movements and the added it to overdraft at start of jan 20×7.. don’t know if that is correct or could have been simplified by using the cash operating cycle
@manishjuddoo said:
cant quite remember..i did a cash budget and listed all the cash movements and the added it to overdraft at start of jan 20×7.. don’t know if that is correct or could have been simplified by using the cash operating cycle
i did exactly the same
I thought you would use WACC, doesnt matter how the project is financed as company has pool of funds and it uses to over cost which is WACC. I used that logic and therefore came to conclusion that WACC should be used.
Question with total shareholder return: the prices for the shares were cum div? Did anyone extract the dividend from the shares’ prices?
@usmanhassan94 said:
i found mcqs too tricky there were hardly 3 to 4 mcq on calculation in section A rest was all theory…!! and tooo many mcq from currency and interest rate risk…:(
did anyone found the same..?same.. theory questions on I- rate on fx risk are always tricky..
practiced the dec 2016 mcqs.. it was easier
@Salvatore
I am not entirely sure about the validity of my choice. I saw that it was financed solely by debt. I read that WACC is best used when you are financing a project from a pool of funds. Since the funds came from debt and only debt, I came to the conlcusion that I should use the cost of debt. No equity was issued whatsoever. Regarding the marks, (if I am correct) I would assume 1-2 max. I think that 3 would be too much…@adlupu said:
Question with total shareholder return: the prices for the shares were cum div? Did anyone extract the dividend from the shares’ prices?GOT 27 %
0.45+0.75/ 4.30
correct?
@harshil said:
I thought you would use WACC, doesnt matter how the project is financed as company has pool of funds and it uses to over cost which is WACC. I used that logic and therefore came to conclusion that WACC should be used.Well actually if we think about it, an investment should be done to maximise the wealth of shareholders. Gearing increases only the expected return due to increase in risk and therefore the WACC should be used. WACC only becomes higher due to taking on debt.
My calculations were different: ((5-0.45)-(4.3-0.25)+0.45)/4.05, something like this, I’m not sure anymore, so i guess I put 19%
@delamanisp said:
@Salvatore
I am not entirely sure about the validity of my choice. I saw that it was financed solely by debt. I read that WACC is best used when you are financing a project from a pool of funds. Since the funds came from debt and only debt, I came to the conlcusion that I should use the cost of debt. No equity was issued whatsoever. Regarding the marks, (if I am correct) I would assume 1-2 max. I think that 3 would be too much…Well actually if we think about it, an investment should be done to maximise the wealth of shareholders. Gearing increases only the expected return due to increase in risk and therefore the WACC should be used. WACC only becomes higher due to taking on debt.
@pinkyjovin123 said:
In mcq what was the payback period and Roce??Is it 3 yrs and 25%
I got 2.5 years and 25%
Another MCQ was with inventory days split in 3 categories, with 100m. acquisitions and it mentioned something that 50% were raw materiales, but I think it was something we didn’t need it. So it was 14 days/ 365 day x 100m = 3835 something like this. Anyone got this result?
@pinkyjovin123 said:
In mcq what was the payback period and Roce??Is it 3 yrs and 25%
I think it’s 2,5 yrs
Well lets hope for the WACC was to be used if not I would lose 3 to 4 marks.
Yes 25% and 2.5 years i got as well
@tomlloyd393 said:
I got 2.5 years and 25%The same here 2,5 years and 25%
The second question was Investment appraisal but the 1st question was WACC .. nothing of working capital management
What did people write for question 31 last part, about the receivables management.
Think the was 5 ways to manage receivables?
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