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It was a bit lengthy.Too many thinks to do in just 3 hours.
me too I wanted to know if we had to take incremental fixed costs for number 1 since we were given the total costs each year???
for incoporating risk, i wrote about capm and risk adjusted discount rate, expected values and simulation..pls was i just writing complete crap?..who knows?
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Too lengthy indeed. I couldn’t remember anything about incorporating risk and didn’t write much about scrip dividends… hope to get 50%..
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My IRR was aroung 8.something%, crap!
Far too much to write. And yes I started with working out the damn EOQ, then realised it wasn’t that. Had to leave bits out. Started with Q4, whch I thought was reasonably doable.
Completely exhausted, fingers crossed for this one, but it doesn’t look good for me, I must admit.
For sensitivity, I waffled about beta, probabilities (EV) and sensitivity.
God, when I think back, I could have done so much better.
IN QUESTION NO 1 : I GOT NPV OF 981 POSITIVE
QUESTION 2 WACC:11.2 % AND 10.45 %
Q3:RIDICULOUS 😀
Q4:FWD MARKET 390 MONEY MARKET 394$ SO FWD IS PREFERABLE
IN EOQ QUESTION : EARLY SETTLEMENT DISCOUNT 902700 AND BULKDISCOUNT 901600 SO BULK IS PREFERABLETELL ME AM I RYTE ?
Paper was easy but time pressured….
I made some blunders in paper so i will penalise surely….
1. In question 1, incremental Working capital is not taken as a consequence of applying inflation rate moreover i made calculation to “million rupees” instead of “000”
2. In question 2, i did (1-tax) with debt included in WACC but tax were already less in the rate moreover when calculation IRR, i didnot take interest after tax….
I made such blunders after great knowledge of F9, and i am not believing that what done even i known all.
Luck really really matters.
May God, i got 50….
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Avinash Bhatia, Q1 was positive but a rather different figure at my end. Q2, i think its just a rounding factor, well done on Q3 and Q4 Same answer
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@avinashbhatia said:
IN QUESTION NO 1 : I GOT NPV OF 981 POSITIVE
QUESTION 2 WACC:11.2 % AND 10.45 %
Q3:RIDICULOUS 😀
Q4:FWD MARKET 390 MONEY MARKET 394$ SO FWD IS PREFERABLE
IN EOQ QUESTION : EARLY SETTLEMENT DISCOUNT 902700 AND BULKDISCOUNT 901600 SO BULK IS PREFERABLETELL ME AM I RYTE ?
Avinash Bhatia, Q1 was positive but a rather different figure at my end. Q2, i think its just a rounding factor, well done on Q3 and Q4 Same answer
Well I seem to have done something wrong on Q4 as lots of people seem to think that Bulk purchase was a viable option, I calculated that though it was better than the prompt payment discount it was still worse than there current method so they shouldn’t take either option.
for f.c i applied 3% inflation
1000×1.03 =1030
1800×1.03^2=1909
and so on . . .
does anybody of u have done this type of calculation@avinashbhatia said:
incremental w.c was
in year 1:22
2:23
3:23.5
4:750is this right ?
i thought 750 should be in year 0?
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sooooo lengthy…….whats going to happened in f7………..afraid
yea 750 in year 0
but working capital can never be consumed and it should be recoverd in year 4
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Hope I can pass it.
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Q2: For the first bond there was no interest rate or maturity date, did we just assume a rate and maturity?
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@carmonkey said:
Q2: For the first bond there was no interest rate or maturity date, did we just assume a rate and maturity?
if no maturity date ,it should be an irredeemable debt? its interest rate = 100x nominal rate / market value@avinashbhatia said:
yea 750 in year 0but working capital can never be consumed and it should be recoverd in year 4
750I also had (750) in year zero and recovered in year 4. There were no other adjustments to WC required.
Do you remember on the WACC question, when including the bonds did you have these figures…
(250m/250m + 62.4m + 40m)*Ke ?
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maaaaaaan!!! thanks tho..! but there was no interest rate though? there was a cost of capital of 7% so used that as the d/f – oh its not looking good, thought i had WACC in the bag too 🙁
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