FM*** December 2023 ACCA FM exam – Instant Poll and comments ***

That was awful. Section c not too bad but still think I messed them up NPV was one of my 12 mark questions which was nice. The section A and B were horrific didn’t know any of them

I had the NPV section C as well. Got confused if development costs should be included . Was your NPV - or +?

Had the same issue for section A & B , too many theory questions with multiple answers per question :(

I was told if they have ready been spent then it is sunk costs and not to include them. Even the 1m absorbed costs in fixed costs shouldn’t have been included. I got a + NPV don’t know if it’s right though. I’m so annoyed studied so so much took all week off work to study and nothing really came up relevant to what I have been studying. Nothing on Islamic finance when I learnt all of the different terms

I understood that they have been already incurred them, so they should not benn included in NPV… But I also lost in this question.. If the net CF is negative for the first year what tax payable should be? I indicated zero..

Yes I messed that bit up I hadn’t come across a question like that before

Totally agree. And even smth that I learned and practiced (again NPV) I completely forgot some things related to tax and working capital… Like just blank peace of paper into the head

What was it with all the market hedging questions??? Defo no what I was expecting

Mine second section C question was to calculate gearing, interest cover and EPS. But they told “for both favourable and unfavourable cases”. But here were also 2 ways of investment, so I calculated for 4 cases ?? Rights issue Unf, Rights issue F. Loan notes unf, and loan notes F ?? hope at lease smth is correct ? But I messed up with gearing because in last minute decided to change RE and in addition some formulas I used moved… Oh, it is too emotional to take this ACCA

Section A was good and section C too - AgeAid which was a NFP with a lease or buy decision and then a WACC for the other Sect C Q. Lots of commentary / discussion marks available - CAPM & DVM, 3Es and VFM, why a lease v buying, and link between cost of finance and creditor hierarchy. However - section B was brutal!!!! FX question & Working capital were horrible but the business valuation was ok. So overall I voted ok and am hopeful for a first time pass.

I had the same section C, Did you get that AgeAid purchase PV was cheaper? I did but the the next question seemed to imply lease was cheaper The exam was okay I didn't feel completely lost at any point

Phew that was full on. So many choice questions in A where I just had to hedge my bets. Section B I had a right panic on. Section C the NPV I think I did well but not sure if tax was starting in period 1 or 2? I think the first year loss got a tax rebate as indicated to do that in the question. My second C question was accounts receivable offer discount or factor. I had net costs for both with the discount cost huge so feel I might have been off on it by quite some way. Barely any WACC or Capm etc, so odd to learn so so much stuff that doesn’t crop up then 8 marks on difference between real and money rate - I can’t think of how you can say enough to get to that level of marks - bananas! Enjoying reading comments everyone

Yeah even i got that question. I literally did the whole bpp and kaplan but never came across a sum like this.

I think the NPV development cost is suppose to be a sunk cost so it will become an irrelevant cost so we do not take that. Fixed cost should be 6m-1m=5m

My 2nd qstn in section C was disaster. The first 12 marks required calculation of Gearing, interest cover EPS in 1 yr for both favorable and unfavorable where there was rights issue or loan note issue. I don't think I will get any mark on those 12 marks.

Anyone with an idea on the section A sensitively analysis question. Sensitivity to savings options answer were for A around 20K, another around 13k, another around 2k and another around 4k Then there was loan note conversion in sec A again option A while said conversion premium was around $500 other options I don't remember.

I adjusted fixed cost but considered the development cost :(

That question was terrible for a last question in an exam. You have to think hard when the exam is almost time up. I don't think I will get any mark on those 12 marks.

I did the same. Do we start adjusting for inflation in year 1?

That is what I did year 1 would be for example x 1.04 , then 2nd year x1.04^2 and so on

Does anyone remember answer to the question that asked purchase power parity for 18 months loan payment in section B? I chose the first option.

I had the lease as slightly cheaper and the next q implied this was correct … it said other than NPV cost

The question related to finding the foreign currency payment in dollar using the purchasing power parity theory what the hell was this? I really wanted to understand what is this concept

Who solved the Early settlement discount and the factoring question in Section C? Did it end up choosing the benefit of factoring as it was a net benefit and the other option ( early settlement resulted in net cost ) so the option was to factor?

I had the same exact, I had a WACC and lease and buy, I remember something with shares in the wacc where I just froze and couldn’t figure it out and used the nominal loan note as redemption. I got a wacc of 13% not sure if this is right. What did you get? With my lease and buy I had buy at 635k and lease at 353k both negative but feel like I went wrong somewhere. So annoyed!

I had the same exact, I had a WACC and lease and buy, I remember something with shares in the wacc where I just froze and couldn’t figure it out and used the nominal loan note as redemption. I got a wacc of 13% not sure if this is right. What did you get? With my lease and buy I had buy at 635k and lease at 353k both negative but feel like I went wrong somewhere. So annoyed!

From memory I had the same or very similar lease for AgeAid but my purchase cost was something around 5k less than the lease cost. (Outlay + maintenance + other costs - gain on disposal) In the end, as is the case with me, section c part 2 is always rushed. Which was the WACC I managed to get a WACC answer off but sure it's not right. Was one of the preference shares or loan notes where convertible? I didn't have time to look into this and focused with having al least a resemblance of a full calculation. I am assuming that if there was convertible debt/loan notes that it would lower the cost of debt and the WACC

But should the development costs have been amortized? I think that they should have been but there was no indication of how so I added them to the reducing balance TAD. I also added a tax rebate T1 but perhaps that should have been added to T2?

I got the same, very fiddly with the trade receivable movement. I got option 1 discount at 202000 loss and factoring at 17k benefit

I remember that I flagged it but can’t remember outcome I ran fishers formula twice once at 12 moths and once at 6mths