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*** F9 June 2014 Exam was.. Instant Poll and comments ***

Forums › ACCA Forums › ACCA FM Financial Management Forums › *** F9 June 2014 Exam was.. Instant Poll and comments ***

  • This topic has 222 replies, 86 voices, and was last updated 10 years ago by rutikanga.
Viewing 25 posts - 26 through 50 (of 223 total)
← 1 2 3 … 7 8 9 →
  • Author
    Posts
  • June 6, 2014 at 5:21 pm #174735
    marta0101
    Member
    • Topics: 13
    • Replies: 25
    • ☆

    I cant remember my capital rationing but with project E zero my all NPVs were included and I didnt have to proportionate it

    June 6, 2014 at 5:23 pm #174737
    kutiez2005
    Participant
    • Topics: 2
    • Replies: 42
    • ☆

    Ah I see, I got a negative NPV for project E but then when doing the rationing part it said to assume an NPV of zero so it must have expected us to use the $5m investment & decide where to use the remaining $5m which is what I did. I think it was E then D then C then $500k of A. Anyone else get that? Can’t remember what my total NPV for that came out at though

    June 6, 2014 at 5:25 pm #174738
    pakistan098
    Member
    • Topics: 10
    • Replies: 16
    • ☆

    I think project E, d c and 20% of the A was the mix

    June 6, 2014 at 5:26 pm #174739
    lavinia69
    Participant
    • Topics: 5
    • Replies: 121
    • ☆☆

    I know I got negative NPV for question 1, but remember nothing else! I do think it was a fair exam though. Just hoping I did enough to pass.

    June 6, 2014 at 5:26 pm #174740
    Neelythere
    Member
    • Topics: 0
    • Replies: 3
    • ☆

    Crazy stuff! you spend 20 or 25 mins trying to get a perfect 13 (or was it 14?) marks on Q1 NPV and then have 10 mins at the end if your lucky trying to extract 8 marks out of talking about sources of debt finance for a quoted company, at least I think that was the question…? Good luck all.

    June 6, 2014 at 5:30 pm #174744
    kutiez2005
    Participant
    • Topics: 2
    • Replies: 42
    • ☆

    Ps I did inflate the SP, VC & FC by (1+i) to the power of n, not sure if right though, did confuse me a bit because the SP & VC per unit were already increasing, haven’t seen that before?

    My TERP was also $4.54 using same calc as you pakistan098

    June 6, 2014 at 5:35 pm #174748
    Gabriel
    Member
    • Topics: 135
    • Replies: 591
    • ☆☆☆☆

    I didn’t like this F9 exam. There were better F9 past exams that I saw. I hated the project specific cost of equity 4 mark calculation. And the useless question of 2 (c) of comparing current assets positions between 2014 and 2015. I just wish to pass. Hope I do, fingers crossed!

    June 6, 2014 at 5:38 pm #174750
    Neelythere
    Member
    • Topics: 0
    • Replies: 3
    • ☆

    TERP –
    $9.2m needed plus issue costs $0.2m = $9.4m

    Existing MV is $56.4m or $4.70 per share (12m shares in issue)

    I worked out a 6 to 1 rights issue. ($56.4m : $9.4m)
    6 shares at $4.70 = $28.20
    1 new share at $4.70 x 80% (20% discount to market) = $3.76
    Total is $31.96 divided by 7 shares gives TERP of $4.57

    June 6, 2014 at 5:40 pm #174752
    Ahmed
    Member
    • Topics: 9
    • Replies: 160
    • ☆☆

    i also inflated the same way by (1+i)^n and got overall got negative NPV which means project was not acceptable on financial grounds

    June 6, 2014 at 5:46 pm #174755
    Ahmed
    Member
    • Topics: 9
    • Replies: 160
    • ☆☆

    i thought my WACC question went well but judging by the comments here most of them are saying 12-13% and i got 11% !! I am in trouble now 😛

    June 6, 2014 at 5:47 pm #174757
    kutiez2005
    Participant
    • Topics: 2
    • Replies: 42
    • ☆

    I made it a 4.8 to 1 rights issue but I haven’t seen one that wasn’t a whole number before. I checked over & over it but I couldn’t make it equal a whole number. I then calculated 2 TERPS, 1 for the investment (including issue costs) which came to $4.54 & one for making it a 4 to 1 rights issue and raising more than the required investment.

    June 6, 2014 at 5:48 pm #174758
    pringo
    Member
    • Topics: 1
    • Replies: 21
    • ☆

    pakistan098, I had the same mix as you for the projects. The NVP of E was going for sure to be negative since it was stated that1) it was going to be undertaken for strategic reasons and 2) we had to assume a 0 NPV to continue with the other parts of the question. If it were positive than why to use 0?? At least that was my logic when first reading the question.
    It was not a difficult exam compared to some mock exams I tried yesterday, and I think this was the reason for making it almost impossible to finish all questions in the time provided. I am good in time management but this one was tough.
    Good luck to all and enjoy summer now, till results time 🙂

    June 6, 2014 at 5:54 pm #174760
    pakistan098
    Member
    • Topics: 10
    • Replies: 16
    • ☆

    @pringo Time was enough if you know how and what to do. yeh practice was important…..

    June 6, 2014 at 5:56 pm #174762
    Marie
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    I am hoping that I got most of my marks in Q1 & Q2. Ran out of time in Q4 was half way through TERP and didn’t get to part D. I think that it was better than Dec 13 but was quite time pressured. The only other part I left out was Q3 Part 2 I hate the de gearing business and couldn’t be bothered thinking about it for 4 marks!

    June 6, 2014 at 6:01 pm #174764
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 3
    • ☆

    yes, yes, me too, 48 negative for Project E (that’s why they offer zero in next part of question), but my total NPV was 3050.

    June 6, 2014 at 6:06 pm #174765
    pakistan098
    Member
    • Topics: 10
    • Replies: 16
    • ☆

    Q in which wacc was required the cost of debt was 4.4% the ke was 10.3 and the mv of equity was 75 and mv of debt was 15 which gives WACC 9.32 %. and if we assume that the Mv of the debt of target co is after tax it would gives us project specific cost of equity = 12. some thing …

    June 6, 2014 at 6:07 pm #174766
    Byron
    Member
    • Topics: 2
    • Replies: 35
    • ☆

    It was undoubtedly the easiest exam set for Paper F9 ever – all of the requirements, except the capital rationing part, had come up in past exam papers.

    Having said that, I gave loads of detail for all the theoretical parts and I ended up with just 5 minutes to scribble something for Q4(d) for 8 marks about sources of finance – I only managed to describe Eurobonds and wrote something about bonds (so I’m hoping to at least garner 2 marks there).

    However I’m so pissed off right now because I did not subtract the 4% risk-free rate from the 11% market return for both CAPM calculations – I got WACC of around 12%, so from the comments above I assume I am not the only one who stumbled on this easiest part. So there go 4 “easy marks”.

    Also, some of my friends said that for Q1(b), we had to choose Project B instead of D, even though the latter had a higher PI, since the NPV from the combination including B was higher. I eliminated B, so I guess I’m missing 2 marks from there as well.

    Hoping to at least get an 82 – 85!

    June 6, 2014 at 6:09 pm #174768
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 4
    • ☆

    I have the exact same figures woww @ pakistan098

    but by reading the comments I thought I did it wrong….

    June 6, 2014 at 6:11 pm #174769
    Gabriel
    Member
    • Topics: 135
    • Replies: 591
    • ☆☆☆☆

    we needed to choose project D because it had the higher profitability index. @Bryon

    I am happy you found the F9 paper good but for me it was not exciting. There were better past F9 exams that I’ve seen. Good luck for your results.

    June 6, 2014 at 6:14 pm #174771
    Samuel
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    In Q1 I think the NPV should have been negative as in the next Q part they said assume the NPV for Project E is 0.

    WACC was 9%
    10.3 x (75/(75+15) + 4(ish) x (15/(75+15))

    Beta was 12.6
    4% + 1.226 (11% – 4%)

    TERP I used the wrong figure so got $4.56 (hopefully did the right calc though)

    WC days I got 110 for 2014
    Quick Ratio I got like 0.95 so may have mucked that up.

    June 6, 2014 at 6:15 pm #174772
    kutiez2005
    Participant
    • Topics: 2
    • Replies: 42
    • ☆

    I also got Kd 4.4 & Ke 10.3 with MVs 75 & 15 but I think I might have made a mistake after that in my WACC because it came out higher. I couldn’t go back over any of it cause I wasn’t well enough, just glad I got through it without having to dash out to puke lol!

    June 6, 2014 at 6:16 pm #174773
    Rahee
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    Woo I got a negative NPV too! For part b) I didn’t have to apportion any, I ignored project E because the NPV was assumed to be 0 and using A, B and C gave me the highest NPV (even though D had a higher ranking).

    June 6, 2014 at 6:17 pm #174774
    Byron
    Member
    • Topics: 2
    • Replies: 35
    • ☆

    @Gabriel:
    Thank you, and best wishes for you as well.

    Not so sure about Project D though, because If memory serves me right, I had read an answer to a theoretical question at the end of the BPP Study Text which said that the profitability index approach gives sub-optimal decisions when projects are mutually exclusive.

    As for past papers, the last two sittings were not that bad neither (I guess the examiner is running out of ideas xD) but I believe this one was better.

    June 6, 2014 at 6:19 pm #174775
    kutiez2005
    Participant
    • Topics: 2
    • Replies: 42
    • ☆

    @Byron – I calculated the total NPV with projects B, C & A and then again with D, C & A and the total with project D was definitely higher.

    June 6, 2014 at 6:19 pm #174776
    pakistan098
    Member
    • Topics: 10
    • Replies: 16
    • ☆

    @rahee but we must take the project and only use the remaining 5000 on the other project.

  • Author
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Viewing 25 posts - 26 through 50 (of 223 total)
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  • The topic ‘*** F9 June 2014 Exam was.. Instant Poll and comments ***’ is closed to new replies.

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