*** F9 June 2013 Exam was.. Post your comments ***

<cite> @jshields said:</cite>
I seem to have a different answer to everyone else on the money market or forward hedge.
I came upo with the forward option being better as if you borrowed sufficint funds to have €500000 in three months time at an interest rate of 9% on the euro account you could only convert 500000/((9%/12months)x3months) = € 488,997.55 at the current rate the interest due over the three months would take the debt upto the €500000 to be recieved. Then even if you take into account that you would get 4% on that € 488,997.55 you were still better off taking the forward rate.

that’s as correct as it can be

<cite>@aneeb123 said:</cite>
i dont understand why people are saying they didnt increase the units by 9000 units … in the npv calculation you should use 9000 for each year because that is the increment in units .. 9000 to 18000 ..increment of 9000 so use 9000 so forward so forth

I didn’t think I was right (by taking 9000 units per year) after someone here posted the same thing you did, and I felt pretty stupid for misunderstanding the most basic question, but then everyone else started saying it WAS 9000 through years 1-4 because the figure given wasn’t incremental, it was additional… But hopefully whatever it was it shouldn’t be more than 4 marks (max).

ef=”https://opentuition.com/members/narinemalakyan/&#8221; rel=”nofollow”>@narinemalakyan said:</cite>
Did you inflated working capital (500,000$) in Q1 a when calculated NPV for the project?
tax relief for WDA was starting with T2, right?

<cite> @narinemalakyan said:</cite>
Did you inflated working capital (500,000$) in Q1 a when calculated NPV for the project?
tax relief for WDA was starting with T2, right?

<cite> @narinemalakyan said:</cite>
Did you inflated working capital (500,000$) in Q1 a when calculated NPV for the project?
tax relief for WDA was starting with T2, right?

<cite> @narinemalakyan said:</cite>
Did you inflated working capital (500,000$) in Q1 a when calculated NPV for the project?
tax relief for WDA was starting with T2, right?

Yes I think you just put on the extra amounts for the following years. I think I got 23, 24, 25 and 26! I didn’t recover it as it said another machine would be bought. Not sure if this was right. And yes tax year 2 at 20 percent I think!

For Q3 exchange rate, once the borrowed Euros (€489,000 approx) had been converted to $ using the spot rate, did the question state a $ deposit rate in order to earn interest? I don’t remember seeing one.
Could someone please clarify this, I’m very nervous, think I may have failed, gutted!!!!

<cite> @meaurement said:</cite>
For Q3 exchange rate, once the borrowed Euros (€489,000 approx) had been converted to $ using the spot rate, did the question state a $ deposit rate in order to earn interest? I don’t remember seeing one.
Could someone please clarify this, I’m very nervous, think I may have failed, gutted!!!!

There were 2 rates. The deposit would earn interest that needed adding on to the final figure. And the other rate you would b charged interest on. I wouldn’t worry to much. I didn’t get it first time out hopefully have passed this time around. Did anyone else get 11.25% for Wacc. Easy exam u thought. When will the answers be up. Which options did everyone say we’re worthwhile in the last valuation q? Also measurement I wouldn’t worry you prob only lost 1 mark : )

<cite> @meazakiros said:</cite>
could you tell me the answer for financial objective

Maximise shareholder wealth and reduce financial risk

<cite> @sanjayk said:</cite>
There were 2 rates. The deposit would earn interest that needed adding on to the final figure. And the other rate you would b charged interest on. I wouldn’t worry to much. I didn’t get it first time out hopefully have passed this time around. Did anyone else get 11.25% for Wacc. Easy exam u thought. When will the answers be up. Which options did everyone say we’re worthwhile in the last valuation q? Also measurement I wouldn’t worry you prob only lost 1 mark : )

spot rate is given second last line of whole question

<cite> @ifrah16 said:</cite>
I used I(1-T) as the cost and the book value as the market value, because I thought the MV would be the same in the case of an untraded loan (i.e. bank loan).. I think that was wrong 🙁

All I can say is, I hope we both pass! (Y) 😀

Same to you

<cite>@phamtung said:</cite>

you wrote about the key functions of receivables!! I tihnk the question asked about the faactors to be considered in formulating a receivable policy
such as level of finance cost in receivables, what policies are being adopted by compeetitors, level of expertise , risk accepted etc ,,, there were 7 marks for that question and i dont know how much answer we should have given

<cite> @icedawn said:</cite>
you wrote about the key functions of receivables!! I tihnk the question asked about the faactors to be considered in formulating a receivable policy
such as level of finance cost in receivables, what policies are being adopted by compeetitors, level of expertise , risk accepted etc ,,, there were 7 marks for that question and i dont know how much answer we should have given

The question asked about the receivables management policy and it is the credit analysis and credit control and so on

Q1, How did u guys treat it? The question says we should dicsount using nominal terms approach. I solved it by applying the inflation rate to the varisbles in year 2, is that right guys? I also calculated incremental working capital.

<cite> @donizback said:</cite>
The question asked about the receivables management policy and it is the credit analysis and credit control and so on

assesing credit worthiness and credit control , collecting amounts due, formulating policy are key functions of receivables

im pretty sure the question asked specifically about the policies surrounding receivables management and not its key functions !! well i may be wrong as well ! cheers i hope everyone will pass