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Q1 NPV was 104,700….most people forgot to add back the Working Cap investment at the end of the 5th year, so the net effect was technically zero.
the f9 paper was good, i am feelin good.
i expect more than just a 50, but guess what any thing over 50 marks is good enough for F9.
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how could I get 104,700 NPV taking into account that I forgot to include WC of $90,000? but because like you say guys the WC would have to be deducted in year 5, the net effect was really zero. I’m glad I got the NPV right.
Had only 2 days for preparing after F6, but wrote all I could. Found the paper OK, that I could write anything on each question, although went mind blank on question 2. came out happy after the exam unlike after F6. Guys, the main thing is we are FREE now (the ones who are done for this session). Good luck to all!@emira said:
how could I get 104,700 NPV taking into account that I forgot to include WC of $90,000? but because like you say guys the WC would have to be deducted in year 5, the net effect was really zero. I’m glad I got the NPV right.
Had only 2 days for preparing after F6, but wrote all I could. Found the paper OK, that I could write anything on each question, although went mind blank on question 2. came out happy after the exam unlike after F6. Guys, the main thing is we are FREE now (the ones who are done for this session). Good luck to all!Good for you! I guess this is one of those rare times when it forgetting something works in your favour! Well done. 7 marks down 43 to go. I wish you all the best my friend.
Okay so am i the only one who got the IRR 14.8 or .9 ? i used the the 15 discount for irr plus the NPV was 50k something. screwed up valuation but got one correct. I think i screwed up WACC as i have no idea how you incorporat irr into tht as mentioned by some and i thought the value of debt was give plus i didnt do anything about the bond so i know i’ll lose mark in that. Factor valuation i read somewhere we didnt need to take interest amount into consideration but i took the interest saved from overdraft and the interest payble to the factor for advancing the receivable? umm what else theoratical was easy the tricky part was b and c of that question but i did okay though i did part b calculation in part c but i mentioned it in b.
Overall looking at the june paper this was definitely easier but a little technical.
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Working capital was supposed to be add during first year of operation which is year 1? and Working capital is normally recovered at the end of operation which shud be year 5.
My NPV is 112,980.
Anyway for Q3.. is there a need to do IRR for the bonds? I thot the Kd was already 7% pre tax.. the MV of the bond was not known tho so we actually need to discount back to get the MV but not the IRR which was what I hav done tho..
Bank Loan Kd should be 6% since it is a straight debt?
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@omyrbutt
based on your calculations 2-4 marks will be deductedreally upset this exam. I have spent hours and hours of studying for this one. It was not 50:50 exam. It looked to me more like 70:30 – too much theroie!! Really gutted.
what did you write for the investment appraisal question, i wrote npv and using irr for amutually exclusive project any one write similar??? was happy with the limitations on the dividend growth model, also wrote i marc on the sensitivity analysis, i did not add back the working capital, i read question wrong when it said ignore capital allowances i took it as ignore WC,!!! oh well lets hope i pass all i want is 50!!!!!
could someone explain how you incorporate irr in calculation of debt for cost of capital? was it needed in question 3?
Want to know about question 4 b? just gearing? debt/equity? what calculations did you do?
Reading comments 3 have got npv in 50s while ppl who did add back working capital have still got different npvs. Oh well i will lose a mark in it or so.
got operational cycle 93 as well so i guess i was correct in it 😀
Q2? Factoring
I got net benefits from both recourse and non-recourse …
Did any1 else got this???@mustafamillwala same here
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hunnibaba
i also got 50700 on npv
i thought as well we are dont have to put working capital in year 5
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I also got 50700 npv 😛
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ACCA F9 Relevant Cash Flows for DCF Working Capital (example 2)
Check out the lecture presentation about 8 minutes in. Working capital is assumed to be returned to the business and we no longer need the extra inventory, expect no more payables and receivables associated with the project. Question doesnt have to tell you to put WC back in. I did it automatically but had to check to make sure it was correct.
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thanks Rolusola. wish you all the best as well 🙂
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q1 why I got 104070 but not 104700? as i added back the working capital in year 5, also i got irr 16%,very upset
Q2 i got both negative for recourse and non recourse, because i included the savings in interest, wrong again
Q3,the wacc calculation was terrible! i didn’t realize the mv of bond,and i didnot exclude tax in the interest payments each year in the npv, so ,,, may only get 1-2mark in this
Q4,ex rights price 7.2 that was right, in part b the is the PEration 16.7? and the new share price would be 6.02? as the interest cover ration, the PBIT does not change right?
i am quite worried ,,probably fail this easy f9!Messed up a lot of this paper, didnt cover factoring in revision so lost 14% straight off. Got about 60000 NPV in question 1, which doesnt seem to match anyone elses. Reckon I have got late 30’s, early 40’s! Hoping for a suprise come February!
Does anyone know when are these papers normally available to view online?
I got NPV $50,000. I dint assume Working Capital to recover at the end of project life, I think there I have made a mistake 🙁
For the factoring, for non recourse I got a net gain as non recourse we need to tk into account the saving for bad debt.
Hi, can anyone explain the correct treatment of factoring in Q2? I’ve also got both negative for recourse and non recourse is that correct? Thanks
The f9 was generally touf for me…got no idea on how to tackle the question on capital rationing….Recourse and Non recourse…TERP was too technical for me. Operating cash cycle was rubbish i did….wot is it abt cost of debt before tax without a current value ? I pray for miracle in this exam.
Hoping I did alrite on capital rationing question, spoke about hard and soft rationing, and divisible/indivisible projects
Quote:what did you write for investment appraisal for 7 marcks question, i was running out of time and wrote on NPV and IRR, relating to mutually exclusive projects anyone write similar, starting to self doubt now!!!
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skopa said 21 hours, 8 minutes ago:
Hi, can anyone explain the correct treatment of factoring in Q2? I’ve also got both negative for recourse and non recourse is that correct? Thanks
I got one positive and one negative, – the only difference in my calculations was the given percentage. I know this was not correct, but after discussions I agree that for non-recourse (1.25%) we should have decreased the level of bad debt from 0.9% to 0, in this case those who did it, told me that in both cases the values were positive but non-recourse was more favourable. In any case comments on the results will score marks.
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