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@leep2310&@junaid98 I think our papers were slightly different. My business valuation had valuation of irredemmable preference shares given the dividend and cost of preference shares. I don’t remember valuation of loan notes. My working capital question had Annual inventory demand as 1800000 current order 300000 holding cost per unit per year $1.00 order cost per order $2250. Current inventory mgt cost was (1800000/300000 × $2250) + (300000/2 × $1.00) = 163500
Inventory cost according to EOQ was 90000. The answer is supposed to be 73500 (saving)
The first question on working capital needed the calculation of networking capital.
Confirm If these were the sane questions for you.I got saving as 73500 too but my head went blank and I kept inputting in calculator wrong but eventually got there
@leep2310 I think the first question was choosing the correct options between two independent events that talked about dividend growth rate and cost of equity. Do you remember the answer to the last question of Section A, which had funding gap as an option?
Ahh! I used buffer inventory. That’s why I got 63500. Ah well, that’s two marks gone.
It’s horrible I felt so confident with this exam revised so much and most of the things I revised didn’t come up no WACC questions no dividend growth no questions on the optimum capital structure traditional theory or the M&M theory even though I had a question about financing with debt or rights issue I wrote about it there just to add in. It has made me so deflated and down as I know I done terribly and this will be the first out of 6 that I fail. Super down about it
@josukegiorno10 your answer might be correct. Our papers will all be slightly different for each person or region I think. My question didn’t have buffer inventory. So don’t worry.
My business valuation in section A had calculating the value for irredemmable preference shares and not loan note like others.@josukegiorno10, I remeber something with funding gap and chose that option too, the only option made sense to me
@leep2310, the other loan note question prior to the 93.05 I guessed, I picked the 98 value I think, didn’t have enough time.
I remeber there was a section A question where it was tesos to dollars I inputted 1.63 I think it was a confusing question but I’m pretty sure that was the correct value
@josukegiorno10
@leep2310
Any chance we can discuss answers on a chat instead of this poll?@leep2310, For the WACC redeemable shares, I used the nominal loan notes as redemption not the share option?
Did u do the same?
The buy v lease when inflating the 12k figure this was quite hard, was we meant to inflate 12k by 20% plus the 12 value included. So 12k x 0.2 = 14400 including the 12k value and the same for year 3 etc = 14400 x 0.3 + 14400 = 18720 for year 3 etc
Anyone who found the question in section C which said discuss the benefits of rights issue or loan notes in a stock market. Did it require discussing both rights issue and loan not or you choose and discuss 1 only?
I also said debt is cheaper than equity and listed the advantages and disadvantages for both and then discussed the optimum capital structure. I tried to obtain marks any which way I could
@katiewebb I also did both but someone I talked to said he did one because the question said discuss the benefit of equity or debt in a stock market. I am also confused. Because I discussed around 2 points for each for 8 marks if I knew it was one needed I was gonna put more points for one side.
@HJohns personally I think they meant to discuss both as one is equity the other is debt and for 8 marks not sure there would be enough to have wrote about for just one? I’ve done 3 mocks and done majority of the past papers on ACCA and believe that they would require to discuss both not just one but who knows I’m a doubting everything right now
Who remembers a section B question relating forex, regarding translation risk but was worded quite lengthy?
I got the exact question too and I was confused by the exact same thing! The buy decision was cheaper but the next question implied that leasing was cheaper…. I was soo confused.
Don’t think buy was cheaper in regards of the buy v lease question (Aid),
I remember getting 353k for the lease and 653 for the buy, I know my buy Decision was wrong but pretty my lease was right. The lease was starting t0
Silly question but for the Section C Lease vs buy Q, where they discussed just normal depreciation, were we supposed to include it or exclude it? Because I assumed dépréciation that didn’t include TAD wasn’t relevant, I just excluded it, but now I’m unsure!
There are no silly questions!
My approach was the same as you that without TAD it was not a relevant cash flow.
Though I did use the depreciation to calculate the vehicles residual value at the end to year 4.
20% reducing balance and $122,880 written down value. I think the information advised that the WDV was the residual valueI deducted the residual value from the out going cash flows in year 4 before discounting back to get the PV and NPV.
From memory, my buy calculation was around 349k vs around 353k lease (same lease as Junaid’s earlier post)
In section C I’m pretty sure it said don’t include depn for the buy which threw me off. Maybe makes sense why I had 653k for buying the asset dammittt, but Yh my lease was 353. The discount rate was 9% or did we all get a different rate?
You think that’s about 2-3 marks lost because of my buy decision being wrong or would it be just one mark and the rest carried forward.
My calculation made it seem my lease was cheaper would I still get a mark for stating the lease was cheaper even though it’s wrong due to my calculation?
@crapants, in terms of depn why would we take WDV, when in the question it said it would be 20% of the asset value.
Wouldn’t it just be 20% of the asset and populate in the final year?
@junaid98 my reading of the question was that they said the residual value was equal to the written down value in year 4
Though I am now not sure, and very much could be wrong.
To be clear I ignored the depreciation for the cash flows and only used the reducing balance to calculate the value in year 4
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