*** F9 December 2012 Exam *** Instant Poll and comments***

Hi,

Q1 – not heard anyone saying that they didn’t inflate the figures in question and used the real rate of return which was 9%. I thought you could use real rate when figures quoted at year 0 and use nominal when quoted at future year values?

No way I passed exam, June 2013 for me!

did anyone realised the risk premium was equity risk premium and not market risk premium???????

i think i got roughly 6% for the cost of debt (kd)

seems like a lot of you have cleared your doubts..i will clear mines now

q1) is the fixed cost relevant since a lot of debate on that? i did add and INFLATE it..appt’ly not meant to!!

q3) the convertible debt..now i did a mistake..i did 19 (shares) * 1.04^ 5. i should have multiplied it by the share price i think to get the convertible value..i was under pressure and completely forgot about that..i did do the IRR..how many marks will is lose since i got the convertible price wrong?

also with preference i did 5*(1-0.3)/100 since it was after tax..appt’ly that was wrong as well..how many will i lose there?

but i did get 9.04 as my WACC which most of you got…just wanted to know where i went wrong so i could get an estimate of my marks..hope get an answer!!

thanks

@aloeflower said:
I read through all of the posts here and found out that a lot different answers…

What is your contribution!!!!!!!!!!! I have a suggestion for all; work the questions for christmas and check the text for any doubt. Then apply the marks and we will all know if we’ve to give ACCA some more pounds for June.

Whatever your result is, please claim favour from JEHOVAH GOD!!!!!

personally it was a fair paper though tricky.

opentutution, F9, pass exam papers u find it..

When do the answers come out!?!

Regarding fixed cost in Q1 although it was incremental however just like depreciation can’t be included as a part of calculations this time it was provisions therefore it didn’t took it. May I am correct or otherwise, depends upon examiner’s article

All the very best to all of you!!!!!! Happie Christmas and happie new year

Fixed cost should be included as its fixed cost which is incremental to the the investment.

A lot of people find it ok. I suggest that its the preparation form open tuition that made it look easy.

we all seem o get the same answer for wacc which suggest we are all right or all wrong but not both. I believe we are all right. I am glad you got.

I am rally looking forward to the results now.

Q1) Somehow I got a small negative number on NPV (-50 something) and rejected the project in part a. I inflated every future CFs (fixed cost included) and used the nominal rate 12% as the df. I have no idea what went wrong that made me come up with negative NPV. Mistyping on calculator, probably. Pretty much screwed on that one.

ARR was 28%, just like many others’ answer.

Q2) Receivable days 60 to 41 days. The cost of discount I got was much higher than the savings on interest due to lower level of receivables, therefore it was not financially acceptble. In the written part, I attributed their problem on receivables partly to the nature of online business, or that the company was tactless in receivables collection and they should a 3-rd party. Or were they a start-up? I can’t recall…

Discount on bulk accepted. I wasted a bit of time on EOQ calculation and found that 15K was actually the optimal ordering amount, but that information turned out to be useless.

I wrote about the Miller Orr Model for the optimal cash level question. I didn’t do any real calculation on that one, though. For those who did, how did you come up with a lower limit?

Q3) Seriously don’t remember what I got for WACC. I did get a pretty low cost of debt on the convertible bonds using IRR method, lower than 5% (most probably wrong). I got a PV of bond of $111.16 somewhere, not sure if it was in this question.

Other than book values tend to be irrelevant in business valuations and can’t represent realizable values compared to MV method, I couldn’t find anything else to write about on that MV vs BV written question.

I wrote a lot on the benefits of convertible loans (cheaper interest, no large cash outflow at redemption, delayed equity, more attractive to investors, esp. good for companies with growth potentials, etc). Hope for full mark on this one. Fingers crossed.

Q4) I only had 30min left for Q4. 180m for the first biz evaluation, 60+m for net asset method(liquidation basis), 300M-ish for another. Anyway, the numbers varied greatly. Can’t recall…head hurts…

I didn’t have much time to write on the merits. Saaaaaaaaad. The calculations for the D/E ratios were rushed. Honestly, my memory is blank for the last several minutes of this exam.

I feel very terrible about this sitting. 2013 June here I come…sob

This is my first attempt on acca exam and i started off writing F7 AND F9 this diet. It was pretty tough plus a better understanding of f5 and f6 would have helped me. I will have to face my f5 and f6 next diet either way.

I think it is okie, maybe all of us will be the best students with the highest marks since recently opentuition beated the other fee charged teaching providers.