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I calculated WACC being 9.13 % ?
Factor with recouse: benefits: $206,000 vs costs $193,000
non-recourse: benefits: $294,000 vs costs: 298,000- Topics: 0
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Hi Guys,
I wonder if any one can recall the different parts of the questions and allocation of marks for each part.Thanks
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@jk0323 said:
@ammar-shabbir
in question 3 market value of bond was not given…it had to be calculte..i calculted it to be 103Market Value of Bond is calculated: Future interest payments at PV + Redemption value at PV
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Q1 Volume – 100,000 units
Selling Price – $16
Variable Cost – $11 /unit
Fixed Costs – $ 160,000 per annum
Cap Ex – 800,000
Residual Value – 40,000
Working Capital – 90,000 (is needed in year 1 )
TAX at 30 % – In ARREARSNPV – ?
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@sanjarbek said:
I calculated WACC being 9.13 % ?
Factor with recouse: benefits: $206,000 vs costs $193,000
non-recourse: benefits: $294,000 vs costs: 298,000for non recourse, the cost is more than the benefit? i have got net benefit for both factoring arrangement
Q1 Volume – 100,000 units
Selling Price – $16
Variable Cost – $11 /unit
Fixed Costs – $ 160,000 per annum
Cap Ex – 800,000
Residual Value – 40,000
Working Capital – 90,000 (is needed in year 1 )
TAX at 30 % – In ARREARSNPV – ?
I also released the working capital back in year 5.
NPV positive 104700 (something like that)
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@sanjarbek
correct.
by the way in the last question bonds were to be issued or redeemedShould have been a straight forward paper, i just got a total mind blank on certain areas
Got similar to others here by the looks, came out feeling very deflated, went in with high expectations, i piss all over the Q+A books and mock exams, very annoyed
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Q 1 NPV £104,700
Sensitivity allowance meant that any slight changes to sales or variable costs would mean project not worthwhile
Q2 93 days cash operating cycle
Q3 WACC – 9%
Q4 Ex rights issue $7:20
I’ll try to to remember some more- Topics: 0
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nogoodboy
i got 50700 on npv wonder how you got 104700
cash operating cycle i also got 93 days
wacc 9%
ex rights 7.20pls expalain how you got 104 700
what rate did u discount the cash flow
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nogoodboy
i got 50700 on npv wonder how you got 104700
cash operating cycle i also got 93 days
wacc 9%
ex rights 7.20pls expalain how you got 104 700
what rate did u discount the cash flow
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nogoodboy
i got 50700 on npv wonder how you got 104700
cash operating cycle i also got 93 days
wacc 9%
ex rights 7.20pls explain how you got 104 700
what rate did u discount the cash flow
@nogoodboyo said:
Q 1 NPV £104,700
Sensitivity allowance meant that any slight changes to sales or variable costs would mean project not worthwhile
Q2 93 days cash operating cycle
Q3 WACC – 9%
Q4 Ex rights issue $7:20
I’ll try to to remember some moreGood i feel better now 🙂 Except my Q3 Wacc was a pile of mince.
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sikander1985
At 12%
Did you include the scrap value?Was it not 11%?
I wrongly started putting in the 10% values and then realised 11% was on the next set down of the value tables.
Sikander probably forgot to add back to working capital in Y5
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Capital Rationing
Hard and Soft rationing (External and Internal factors)
Divisible projects should use profitability index and rank projects accordingly. Then invest in highest ranked projects first.- Topics: 0
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Interest Cover
Before was 27/10 = 2.7 times
After was 31.4/3.6 = 8.7 times (something like that)
I know that profit would go up and interest would have gone down
Ended up with $45 million bond- Topics: 0
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on q1 who ever got npv +104700 made a mistake by adding the 6th which was -54533 negative
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Gearing
Before was 120/140 = 88%
After was 45/210 = 21%
I realised after the exam that there would be a share premium account in equity after the rights issue- Topics: 0
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Cost of Debt
Years 1-6 $8 & discounted at 4.767 = $38.14
Year 6 $100 discounted by 0.666 = $66.60
Total = $104.74
Then IRR- Topics: 0
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050089
please advise how you got +104700 i still dont understand
nogoodboythe $8 was before tax it was suppose to 8*(1-.3) 5.6 than you discount
@sikander1985 said:
050089please advise how you got +104700 i still dont understand
The cost of capital was 11%
you needed to release the Working capital in Year 5
and i am sure you are to include the tax from Y6 – this is still part of the project. Anyone agree/disagree?- Topics: 0
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yes i did just now including working capital in year 1 and release in year 6 but get +121537 anywhere thanks 05008967
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