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how did he calculated working capital @10%
0 (500)
1 (600)
2 300
3 (100)
4 900from example 3 of chapter 8
because generally we place Working Capital at year 0 by (-)
and Include Working Capital at the end (+)how did he calculate working capital by the rate of 10%
It would seen that you are not watching the lectures because I work through this explain in the lectures and explain it. There is o point at all in using the notes without watching the lectures – they are lecture notes and it is in the lectures that I explain and expand on the notes. If you are not watching the lectures then you need to buy a Study Text from one of the ACCA Approved Publishers and study from there.
Time 0 is the start of the first year, and working capital is needed of 10% of the first years revenue. 10% x 5,000 = $500
Time 1 is the end of the first year / start of the second year, and the working capital needed is 10% x 11,000 = $1,000. They already have $500 working capital and so they need an extra 1,100 – 500 = $600.
It is the same logic in each following year.
okee so this the internal method of calculating working capital the thing is i m from pakistan and its every thing is revised here so i didnt watch to saw lecture notes mostly I,ve did all the question from all books from ICMA Books (its our institute in pakistan that have created focus study) i have available books not only the notes of Opentuition but also have books of following
Books
(1) CFAP book
(2)(Colin Drary Book) of Management and Cost Accounting 8 Edition,
(3) Focus Study Book of ICMA,
(4)FM from Opentuition,
(5)ACCA P4 mostly i have calculated working capital in amount like at year 0 (-) and at
the end of year (+)Add back.by the way i have got a telly now
thanks!
Years Cash Flow = Working Capital Net flow
0 -15000 = (-5000*10%) -500 = -15500
1 3000 = (-11000*10%)-(-5000*10%) -600 = 2400
2 9000 = (-8000*10%)-(-11000*10%) 300 = 9300
3 6000 = (-9000*10%)-(-8000*10%) -100 = 5900
4 7000 = (0)-(-9000*10%) 900 = 7900If you are taking Paper FM that I do not understand why you have all those books. Our free lectures alone cover everything needed to be able to pass the exam well. The essential book is the Revision Kit from one of the ACCA Approved Publishers because it is full of past exam and other exam standard questions for practice after you have finished studying. Question practice is vital for passing the exam.
I do not know why you have typed out the net flows when you have them in the printed answer. Your time 4 net cash flow is not correct – it should be 9,900.
Also you would lose marks in the exam for not showing your workings properly (although you will of course be entering them in the spreadsheet provided and then using the NPV function to actually discount the flows.
Congratulations on having a TV 🙂
Okee thanks must do working properly
oh boy didnt included scrap value then it should be 9900 my Mistake.
Wel I had additional book because for example if I cover all courses of FM any type of question can be related to FM would be best for me to gain more grip also I will also try some quiz so it would be more best for me to clear.
By the way thanks for all help sir.
Be careful though because (for example) the syllabus for Paper P4 (which is now called Paper AFM) contains many things that are not in the syllabus for Paper FM.
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