*** ACCA Paper SBL March 2020 Exam was.. Instant Poll and comments ***

Did anyone recalculate the NPV and payback for the investment appraisal? The cash flows before tax didn’t include the sales figure so totally changed the NPV and payback period. Just wondering if I did this and possibly didn’t need to. Ran out of time as usual I really struggle with time in these exams.

I failed this exam 4 times so join the club lol

I was along the same lines as you. Hopefully it’s a pass, third attempt at this paper.

I managed to attempt all the questions, but I struggled a lot with question 3.
And regarding changing the governance structure I mentioned that they need to add more NEDs and additional committees.
Hopefully I have done enough to pass.

Did this in Manchester. Such a strange exam experience.

Lmao, it’s funny because my answer and yours are exactly the same. I feel confused.
Also used 6 i’s and posit

I used SWOT for both IOT & Gov Sector for question 1b – the evaluation of strategic options – Does highlighting the SWOT of each option also work as an evaluation? Or did we have to use only pros/cons, SFA or Financial, Operational and Strategic Issues?

Difficult exam. Couldn’t real make sense of some of the questions. Also couldn’t work out what models went fit what questions. Not looking good for me.

i don’t really think it was required to re calculate the NPV , I wrote points about
– not taking inflation into consideration – cuz fixed costs were consistent.
– he took tax rate consistent over the years which might not be the case in reality .
– discount rate which he used .
– he took the NVP and multiplied it by 6 – inappropriate
– payback calculation was illustrated wrongly . while calculation was right .. might mis lead the management
– project will be financed by loan, there wasn’t any interest cost in the NPV
– i also questioned the was the calculated the contribution % from future sales i guess . i wrote this should be at least based on some historical data .

yea that’s what i remember on NPV. hope got it right 🙂

this is my second attempt, and comparing to Dec. i felt this paper was mush better .. some easy marks were there on risks NPV marketing how to help CEO to implement change .. SFA for both potential option .. and ethical issues and impact of the threat email they received

i really messed up in the last bit about board and GC tho i wrote few points like balance of board and should involvements of other shareholders .

Hey all just a short breakdown on what I wrote

1) there were a lot of risks which you could have mentioned . The ones I mentioned where
– shareholders want to be listed soon and that requires full compliance with the structure of the board which they don’t meet, not taking that seriously would have adverse effects and compliance risk also seen my clients as a bad thing – unable to win or retain contracts (high impact, high likelihood)
– management motivation – it mentioned that the directors were already unhappy with us (the consultanty firm) joining and proving advice to tt4u. Could also be seen a risk as they are hesitant to change
– risk that the survey was seen as a ad hoc rare exercise. Won’t be able to understand clients needs therefore difficult to win contracts and retain
– then all the risks to do with the survey
– risks of the confidentiality breach impact reputation and legal fees also another risk affecting winning new clients etc
-competitor analysis also wasn’t done so they aren’t able to see where they are in the market. Another risk you could talk about
-risk of falling behind they are a tech company and should be at the forefront of innovation risk of getting left behind

1) for the next part I used suitability feasibility and acceptability for both. I overall went for the government one due to the fact the company only have 75 staff doesn’t look like they have the resources for the internet home appliances sector Which would also need a lot of financial backing or maybe if they target one sector within the market it may be feasible. Both were risky but the government one overall I felt had less risk it was also more in line with the strategic position of the company providing similar services to a new market which is ‘market development ‘ also shareholders may prefer government service might be good for reputation. There was a lot to talk about for both projects in all.
1) the controls I mentioned things such as control environment setting tone from the top, then control activities such a segregation, passwords, authorisations, training, physical access, reporting on compliance and regaularly testing the controls in place, also carrying out a risk assessment regularly to make sure the controls are in place . And monitoring

2) reviewing the work of the investment appraisal obviously the work was done by a junior new member so can question all his creditentials coming from a new department, wasn’t reviewed by the FD either so another issue. Forecasting sales revenue went up 99.6% from Y1 to Y5 that’s a very optimistic assumption need to get the detail behind all those. The marketing costs flatlined after year 3 which didn’t make sense but also if you are launching a new cloud softaware surely you would incure a lot of marketing costs in the first year not the subsequent years didn’t make sense . The tax rate remains unchanged but surely that would change as profits would be made. The discount rate used would need to take into account risk but it was also under the assumption of the old loan they previously had. What if they need a new loan to finance this venture can’t use the old loan assumptions to work out the discount rate.

2) e marketing was A nice one. talked about the traditional push marketing approach and how everything is more pull marketing where the customer generates the initial interaction. Followed by the 6’is and applying them to the cloud computing option as much as possible

3) this is where it gets interesting I figured that the MOBEID approach was a transformational change as they kept mentioning in the paper but the factor to think about was also the speed of the change. Surely they couldn’t just do it overnight therefore I said the change would be a transformational change at an slow pace which is – evolutionary change (according to the model) and the advice I gave to the CEO was to use LEWINs model of – unfreeze: change and then refreeze. And giving step by step guidance on how to do that.

3) the ceo letter was pretty self explanatory

3) the information for the new board structure I mentioned needs to be a balance of NEDS and EDs but also the fact that committees would be useful to satisfy all stakeholder groups risk, nomination, audit, remuneration. Also mentioned how the board should be diverse from all backgrounds, genders, variety of skills . Also no mention of a directors induction which would be good, and a CPD done so everyone could keep up to date on skills

3) qualities of information given to the boardI talked about
Accurate info
Relevant
Reliable
User targeted
Timely
Forward looking
Highly summarised
Non routine info
Maybe incorporate environmental reporting
And maybe consider integrated reporting

This way all stakeholder groups can benefit. The Meiobid approach was all about the client and stakeholders being at the heart of everything that was done so giving them that kind of information (above) should keep them happy

Let me know what you guys think

@navjot23 said:
Hey all just a short breakdown on what I wrote

1) there were a lot of risks which you could have mentioned . The ones I mentioned where
– shareholders want to be listed soon and that requires full compliance with the structure of the board which they don’t meet, not taking that seriously would have adverse effects and compliance risk also seen my clients as a bad thing – unable to win or retain contracts (high impact, high likelihood)
– management motivation – it mentioned that the directors were already unhappy with us (the consultanty firm) joining and proving advice to tt4u. Could also be seen a risk as they are hesitant to change
– risk that the survey was seen as a ad hoc rare exercise. Won’t be able to understand clients needs therefore difficult to win contracts and retain
– then all the risks to do with the survey
– risks of the confidentiality breach impact reputation and legal fees also another risk affecting winning new clients etc
-competitor analysis also wasn’t done so they aren’t able to see where they are in the market. Another risk you could talk about
-risk of falling behind they are a tech company and should be at the forefront of innovation risk of getting left behind

1) for the next part I used suitability feasibility and acceptability for both. I overall went for the government one due to the fact the company only have 75 staff doesn’t look like they have the resources for the internet home appliances sector Which would also need a lot of financial backing or maybe if they target one sector within the market it may be feasible. Both were risky but the government one overall I felt had less risk it was also more in line with the strategic position of the company providing similar services to a new market which is ‘market development ‘ also shareholders may prefer government service might be good for reputation. There was a lot to talk about for both projects in all.
1) the controls I mentioned things such as control environment setting tone from the top, then control activities such a segregation, passwords, authorisations, training, physical access, reporting on compliance and regaularly testing the controls in place, also carrying out a risk assessment regularly to make sure the controls are in place . And monitoring

2) reviewing the work of the investment appraisal obviously the work was done by a junior new member so can question all his creditentials coming from a new department, wasn’t reviewed by the FD either so another issue. Forecasting sales revenue went up 99.6% from Y1 to Y5 that’s a very optimistic assumption need to get the detail behind all those. The marketing costs flatlined after year 3 which didn’t make sense but also if you are launching a new cloud softaware surely you would incure a lot of marketing costs in the first year not the subsequent years didn’t make sense . The tax rate remains unchanged but surely that would change as profits would be made. The discount rate used would need to take into account risk but it was also under the assumption of the old loan they previously had. What if they need a new loan to finance this venture can’t use the old loan assumptions to work out the discount rate.

2) e marketing was A nice one. talked about the traditional push marketing approach and how everything is more pull marketing where the customer generates the initial interaction. Followed by the 6’is and applying them to the cloud computing option as much as possible

3) this is where it gets interesting I figured that the MOBEID approach was a transformational change as they kept mentioning in the paper but the factor to think about was also the speed of the change. Surely they couldn’t just do it overnight therefore I said the change would be a transformational change at an slow pace which is – evolutionary change (according to the model) and the advice I gave to the CEO was to use LEWINs model of – unfreeze: change and then refreeze. And giving step by step guidance on how to do that.

3) the ceo letter was pretty self explanatory

3) the information for the new board structure I mentioned needs to be a balance of NEDS and EDs but also the fact that committees would be useful to satisfy all stakeholder groups risk, nomination, audit, remuneration. Also mentioned how the board should be diverse from all backgrounds, genders, variety of skills . Also no mention of a directors induction which would be good, and a CPD done so everyone could keep up to date on skills

3) qualities of information given to the boardI talked about
Accurate info
Relevant
Reliable
User targeted
Timely
Forward looking
Highly summarised
Non routine info
Maybe incorporate environmental reporting
And maybe consider integrated reporting

This way all stakeholder groups can benefit. The Meiobid approach was all about the client and stakeholders being at the heart of everything that was done so giving them that kind of information (above) should keep them happy

Let me know what you guys think

please let us know your results in april! this is very good!

Ikr. I be like what the hell is this.