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In section C did anyone get a NPV for a machine that cost 1m and project was over 4 years. Fixed costs were 50k and sales were at 3000 a year. I got a negative NPV and think messed up big time
@kushpeshin1 said:
Got creditor hierarchy at a 5 mark Section C. Where exactly in the syllabus is this?Sec B: Got a money market hedge Q but no domestic interest rate.
I got that too. I think it was referring to the pecking order theory. I talked about the ranking of sources of finance and how the risk/reward play a role on determining the cost of capital. Debt is less risky than equity, so the cost is cheaper.
I had a Mcq question on trade receivable days, which was simple to get 2 mark on, but they pulled a sly one where the trade receivables was either average receivables or year end receivables as a choice to use to compute the answer. In the end, I went with the year end trade receivable figure to compute my answer. Anyone can confirm whether this is correct?
Overall I think I have done another to pass this exam. Ran out of time for the weighted average cost of capital in section C. I knew how to calculate it, but it’s a shame that these exams are simply not long enough to fully answer all questions, as I have the knowledge. Really think that more time should be given for computer based exams, as compared to paper based. It’s actually slower to work with on the computer, so not really fair to allocate same time as paper based.
I really hate those forward rate, hedging questions, had quite a few which are into my time and in the end just guessed it. Otherwise I would have completed the WACC question. What a shame!
Luckily I came prepared this time for the NPV question comparing against IRR as to why it is more superior as an investment appraisal method. 😉
Section A and B was so hard, I feel like I have studied and all that sacrifice for nothing!!
Also Why everyone gets different questions, you see I did not have any questions with loans, I would have done those questions!!From my experience in writing i have seen that the way questions are asked are always rebranded and the questions asked are far different from what is being provided in the sample past the questions!…
Seems like every one got different questions, which I think it is not fair or right. If I did get the loans questions for example I would have done it fine.
Section B was the worst for me. I got a lot about interest rate futures/forwards in section A and B, which I was not expecting. Another section B was about earnings yield/market capitalisation which confused me.
Also got the SFP working capital section C question and struggled with the written element about working capital investment and funding policy.
Nothing about cost of capital at all.
I feel the spreadsheet functionality needs improving. I also had to keep scrolling along to read the full lines of the questions. With time being such a pressure, could really do without these annoying things!
Section a and b were awful. Section c was ok tho but after getting bogged down in forward contracts and business valuations I left myself shot to finish section c. Fingers crossed for 50%
I got this question as well. Once I worked out the values the Assets balanced against the Equity and Liabilities so I’m hopeful I got it right. If you copied the heading from the current year and added in a new line for the 8% Loan raised to finance expansion, filled in the figures given such as 700 cash 3000 overdraft 6618 profit to retained earnings this just left the Inventory Trade receivables and Trade payable to be filled in using the new Revenue and cost of Sales figures. I could be wrong though!!
I got this as well Sales were 750k a year uplifting by 5% each year so year 1 was 787.5k and it kept rising after this. I ended up with a NPV of £426k I believe discounting at 9%. I wasn’t 100% sure what to do with the 2nd offer though so I did the same deducting tax and discounting at 9% before dividing both by the Annuity for 4 and 3 years respectively to give an annual cost.
@Mattbryan66 said:
I got this question as well. Once I worked out the values the Assets balanced against the Equity and Liabilities so I’m hopeful I got it right. If you copied the heading from the current year and added in a new line for the 8% Loan raised to finance expansion, filled in the figures given such as 700 cash 3000 overdraft 6618 profit to retained earnings this just left the Inventory Trade receivables and Trade payable to be filled in using the new Revenue and cost of Sales figures. I could be wrong though!!I think one of the things that confused me in this question was that it said that non current liabilities would increase by 11%. But the loan notes alone would increase the non current liabilities by more than that if added to current figures. I don’t know, I got a bit nervous with this question and might have missed things. In any case, I’ll see in 6 weeks hahaha
It was horrible! A but also B section!
I want to know where can we find the answers because i really wanna understand the logic of solving such cases!
In the books are the basic basic basic knowledgement!!!!!!
How can we prepare to get a 5?
I really think that Acca is not anymore what was in the past! The focus now is to have a lower passing rates in order to increase the company/organisation profits!I think it was Non-current Assets which increased by 11% which might be where the confusion was. But you will still get Mark’s for all the other bits filled in even if a few bits are wrong so I wouldn’t stress
@Mattbryan66 said:
I think it was Non-current Assets which increased by 11% which might be where the confusion was. But you will still get Mark’s for all the other bits filled in even if a few bits are wrong so I wouldn’t stressHa! That might have been it. I got a bit annoyed with this question and guess I read it wrong. I did the same you did for the rest of the question do hopefully will be enough 🙂
I got the revised balance sheet too, just had to follow what they said and adjust the cash, loan, the main calcs was to calculate the revised trade recvable / payable/ inventory figure from the increased rev/cogs using the days given. Then add the profit to the reserves, i was like woah when i first looked at it but after i worked it through it balanced. The theory q after that though about working cap inv policy etc i was abit stuck on though i rambled my way through it
@emma28 said:
Didn’t like this exam at all. Section A and B were horrific. Section C was average. ?Agree! Section B was a disaster for me!
Hello,
I had a question on the exam like:Convertable 9.5% loans, redeemable after 5 year with 7%redemption yield. They can be converted into 10 shares. Current share price 12$. What is the premium per share?
As I recollected correct..
Answers:
1) 0.45 2) 12.45 3) 124 4) 4.51How should I calculate it?
No, it was positive but it was higher than the cost! Ha not sure where I went wrong didn’t have time to go back!
I too found Section A & B very hard. Section C was fine. A simple NPV and WACC question. The NPV I got to be positive by about $8m
It was actually working capital question, but yes, was a surprise! Didn’t balanced in my hands, but hopefully i did it with bits and pieces for some marks.
@beckytorpey said:
I too found Section A & B very hard. Section C was fine. A simple NPV and WACC question. The NPV I got to be positive by about $8mI had easy A and B, but than that SFP question in section C. It wasn’t actually difficult, but in exam situation you really want to have questions you know haw to approach before the test.
I think this may balance exam with different questions: straightforward section C combined with difficult A and B, and easy A and B combined with stressful section C.@solomama said:
Hello,
I had a question on the exam like:Convertable 9.5% loans, redeemable after 5 year with 7%redemption yield. They can be converted into 10 shares. Current share price 12$. What is the premium per share?
As I recollected correct..
Answers:
1) 0.45 2) 12.45 3) 124 4) 4.51How should I calculate it?
what I did was calcaluate the PV of the loan not and conversion. which was £124.51 I think.
deduct the current MV of £120 which gave a premium of £4.51 then divide by 10 shares which gave the answer of 0.45.
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