*** ACCA Paper FM September 2018 Exam was.. Instant Poll and comments ***

I thought the exam was difficult, the MCQ’s were horrible. My long questions were the lease vs buy and then eac of the borrowing costs. How did people attempt the eac part? Then the other long question was cost of equity with CAPM and project specific cost of equity which I thought was ok but it was only for 6 marks!!

I was so happy to see the investment appraisal question in sectionC?????! Yey!! I hope it helps me score above that 50 pass mark. The capm question I wrote only a few things, hope it goes well. SectionsA and B had a mix of difficult and okayish questions, the theory question in sections and B were tricky, some of the calculation questions were fine and others were long so I just guessed answers due to time.

MCQ Sec A was horrendous!!! Sec B not much better. Many q’s tested that I have not seen in practice papers!

My first Sec C was all around Sensitivity analysis – to Sales volumes and DF and then calclulate the rate of tax which would bring it to Zero (????) anyone else had this question? I have never seen it tested like this in previous exams.

Second part C was CAPM with specific cost of equity and discussion around risk and return.

VERY HARD EXAM!!

Hi,

I had the exact same paper.

I will wire what ever I remember.

So rate of tax which NPV 0 is 27.65% or round up to 28% answer.

How I got this answer, I copied all forecast figure from 1 to 4 years and I kept increasing tax to get to 0 NPV. I think it was common sense question.

About half of Section A question were new to me. None like I’ve done before, and I did all Revision book from BPP. This is strange, how can it be so?

The exam was better than I thought! Though I can’t see many people who had the same section C questions. I had 1 based around sensitivity analysis, though the tax part was confusing. The 2nd was 2 different factor options and looking at costs and benefits. What did people get for these???

This exam was awful. 🙁 It had everything in it that barely was covered in my studies. In section C I had lease vs buy (where I think I did ok with calculations), EAC (also think I did ok) and why NPV is superior to IRR (only remembered 2 out of 4). I felt like there were some questions that were repeated in all sections in some way. In section C I also had were the asked for cost of capital with CAPM method and to calculate cost of capital specifically for project (beta re-gearing etc) which I completely flopped with. In section B there were questions about market value of loan notes and business valuation on earning basis (completely guessed all of those questions). Can only cross my fingers and hope for the best but all in all not a good feeling about it. Will continue to study so if i don’t pass i can book it for December straight away.

This was my third attempt and felt it was a better paper then the other 2.

Let’s see what happens

There was a rights issue question about share price being $7 and a rights value of $0.40 – the answer I got wasn’t on there. Just couldn’t work this one out.

NPV and IRR I just couldn’t list anything of why NPV was superior. Only thing I remembered is that NPV Was superior but that was already given :((( lost 8 marks there

Lease and but back straight forward

3 and 4 year renewal I think mine came to being cheaper for 3 years so suggested that.

CAPM question for current and project specific I got 17.8% and 12….%

Couldn’t think what to write for risk-return question at the end.

Lost a lot of marks on theory but am hopeful. Can’t imagine going this again.

Cost and benefit questions on early settlement and discounts I remember one being $12000 benefit and the other was $48000 I think as a benefit also

The money market hedging can’t remember the answer but it was a borrow home and deposit abroad because you always borrow where the money is and as we had to pay abroad. So glad I remembered this bit if that was right that is.

All that said it’s done now. Just hope it was enough to pass :/

I guessed many of the new questions especially in section B! The one that is bothering me is the MV of preference shares for some reason I couldn’t get to the answer.
I think my risk adjusted capm came to 19%? I’m pretty sure I had it wrong though… when I ungeared I got .66 then regeared to about 2.5??
I also got 28% on the tax question but it was total guessed I copied our all the cash flows as kept changing it – I couldn’t get exactly to 0 but 28 gave me -95.
Went a bit blank on risk and return but managed to write something. Everything was attempted, but was very shocked also at the length of calculations in sec A, almost every Q involved long calculations. Many guesses – fingers are crossed cannot imagine doing this again, haven’t felt this bad since I sat f5.

Did anyone have the upside/downside mcq? Any clue what that was about? I had to drag the boxes across but they would only go in one of the two columns. I wish they’d just stick to a,b,c,d radio buttons.

Hi vicki

You and me had same long questions in section C

Surprise was tax rate to bring NPV zero
In sensitivity analysis question

What i did was punched all numbers again on excel and was changing tax rate till i get NPV zero 🙂

so I got 31.6% or 31.16% *dont remember exactly but one out of this) as tax rate and then wrote a comment that Nov will be zero at 31.6 rate tax rate. Then spent almost five min to figure out if i could create some formula to show to examiner but was not able to do so. So i kept original working of punched numbers as working

It was tough paper. No doubt

Hope i make it through

I think u only worked on tax rate

We also had to work on tax as well as tax benefit deductible