*** ACCA P4 June 2017 Exam was.. Instant Poll and comments ***

Does anyone remember how the exchange rate was quoted for NPV calc? I think I automatically assumed the cash flows of the subsidiary were less in $ so I multiplied them by 0.2….. but now not sure if this was correct.

Also, was the working capital supposed to be inflated? I did not inflate it and used 90 for each of the three years but now I am thinking it should have.

no the working capital is 90m USD only in y=o. then it increased some cents per 1 USD of revenue increase and got it back in y4.

my mistake,

i must have confused it with maybe costs (not in the question, but in answering your question above 😛 , because sales increased i think by inflation or 25%, cant really remember now and i confuse it with the many past papers i did).

@sprocker said:
There is a technical article on the bond calc. A yield curve needed to be obtained from the government bonds. MVs were given together with coupon payments for government bonds for individual years. You needed to calculate the yield for one year first, then use this yield to calculate the yield for second year and so on. For example 105 (MV) = 108 (coupon with principal) * (1/(1+r)). r = 108/105 -1 = 2.9%. This is the yield for year one. Then you needed to calculate yield for year two. For example 103 (MV) = 2 (coupon) * (1/(1+0.029) + 102 (coupon with principal) * (1/(1+r)^2). And so on. I recommend that you read the technical article as it is very well explained in there.

Tks

@tancw95 said:
I thought the question only mentioned first year R 800 m and then increased R 90m each year.

Did the question mention the working capital is to increase according to sales?
Anyone can confirm it?

Workinc capital did not increase according to sales. The incremental wc was 90m each year but I am not sure now whether it was in $ or R. Does anyone know?

Q4 b) Adavantages and disadvantages of traded option vs OTC options
Q4 c) Explain delta hedge + demonstranting how to hedge using that +the impact of increase of 0.1% on the interest rates.

@jyacca said:
Q1
(A) why acquisition fail and how to ensure acquisition do not fail.
(B)(i) estimate Dharma co current value and estimate additional value created from the acquisition.
(Ii) estimate number of share exchange for the share exchange offer method.
(iii) calculate percentage gain for the cash and share exchange method
(iv) discuss the shareholders reaction and state assumption
(v) estimate cash available from operations to fund cash payment method
(vi) impact of reduction of dividend

Q2
(A) calculate the bond value when AA and when BBB
(B) Reasons credit rating was downgraded by credit agency
(C) impact of the downgrade in credit rating on the ability to raise finance

Q3
(A) investment appraisal and assumptions
(B) drawbacks of 2 transfer pricing method – 40% contribution and at cost

Q4
(A) 3 interest hedge method
(B)Advantages and disadvantages of traded option vs OTC options
(C) Explain delta hedge + demonstranting how to hedge using that +the impact of increase of 0.1% on the interest rates.

@tancw95 said:
I thought the question only mentioned first year R 800 m and then increased R 90m each year.

Did the question mention the working capital is to increase according to sales?
Anyone can confirm it?

mentioned first year R 800 m and then increased by $90m for the next 3 years.

@accalegend said:
y2 x 1.25 y3 x1.25^2 …This is the same approach I have folowed.

I am sure the question said that the sales and the costs are prior inflation so I inflated them. Guess we need to just wait and see the results!

Hi all.

I have read through all the comments posted here and it’s rather sad that majority of us think that the P4 exams was either hard or disaster. Which I don’t disagree with, I wrote P4 in Dec 2016 and had 45 and June 2017 is my 2nd attempt. Though I managed to do a few calculations here and there but can’t vouch if they are correct.

The reason for posting here is that ACCA has sent us a link where we can comment on how the exams went which I think it’s our opportunity for us to show that the exams are not fair, just and reasonable.

1. Time: if the exams are for a minimum of 3:30 hours to 4 hours maybe many of us would have had time to think properly and respond to questions accurately. As the time pressure take away a lot if ability to think? That’s my opinion though.
2. Exam structure: it seems the exam structure doesn’t favour us so much in the sense that for Q1 you need the calculations figure to be able to write your report properly and come to a valid conclusion or recommendation.
3. Exam format: prior to 2013, the format had 5 questions were section A had 2 compulsory questions and section B had 3 questions where you had the option to choose 2. All questions carried equal marks. And there were great chances of coming across questions that you were very comfortable with. But now it’s so difficult to choose now, you really need to cover the entire syllabus to manage to pass

I see a lot of us here have struggled with the papers at 1/2/3 attempts, some are working full time, some have young children, no support, distance learning self study, as the cost of professional tuition is a discussion for another day( except if you have study support from your organisation). Some have taken time off from work out of annual leave, unpaid leave just for the purpose of this exam,putting in many hours of study but get to exam hall and the questions are as hard as it can get.

Enough of ACCA telling us exam practise is the key, how many questions has each one of solved prior to exam that it’s the same with the real life questions.

Instead of us coming on this forum to vent our anger, let us individually give our feedback directly to ACCA, I think the survey will close on the 14th June, who knows our comments can make the more lenient in marking. Let’s all do this please.

taxman123, would you please tell us in which previuos question or question form BPP RK there was a question in which you are supposed to figure out the number of shares that you have to offer in order to acheive a certain gain distribution between the shareholders? i have run through all questions for several times and i have not found any similar to this….

when i first read the requirements for Q1, it seemed straightforward only to get stuck halfway as the calculations were not adding up,. i then ran to section B halfway the number. but i realise this was a big mistake. i believe i should had assumed an answer and moved with thereby pickip us some marks rather than forgoing so many Q1 marks.

i feel doomed but still hoping for that 50

@elie1lwin said:
Hi! How was free cash flow calculated with growth % ? Do you have to find “r” from the growth formula? I’m really not sure about that part. Please help.

Are you asking about Q1 ?