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That is right B & D cant be taken at the same time i thought it would either be ABC or ACD as NPV of E is Zero so i ignored E but dont know if it is the right approach. My Maximum NPV was 3900 with ABC
FS28 and Ahmed!
That is why I say, “I lost marks under pressure”. The combination which produce the maximum NPV are Projects D, C and A ( 1500 + 1350 + 200 (500/2500 x 1000) = 3050 Max NPV.
You’re correct – when a project is mutually exclusive; it only possible to do one or the other, but in the exam, I made a blunder and ask for uncommon favour from ALL the hands that my script will pass through. What else can I ask for?
Ahmed! You have to proportion the remainder of funds, so you’ll not be able to invest in ALL of A – limited to 5M. Thanks Colleagues!!!!!!!!!!!!!! I am waiting for the tutor to give his solutions – we can be at ease until August 8, 2014; the big day!!!!!!! Remember we must share information – this is what makes us better, increasing knowledge and competency.
Regards,
My Npv was negative about 24.9million. My fc and vc were inflated by dividing with the pv table. My fc was inflated on the cumulative Bal.
@cardine
Re Q4(b): In the DGM formula, the growth rate is subtracted from the cost of equity, not added. The equity market value given by the DGM would be $58.92m.The Exam in my view was very ok and very fair. Balanced questions, am sure its a pass for many!
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I agree with marta0101. Question 1.a i got a positive NPV because i used Project E investment of 5m. I.b.i got a negative NPV.
My answer to Question 1 will appear on the website today (and my answer to the other questions in the next one or two days).
Do let me know if you find any mistakes!!
Thank you so much Sir John i got NPV -ve 48 as well now i can sleep in peace that 14 marks are in my pocket 😛 However i didnt include Project E in capital rationing hope i get atleast 2 marks 😛
I also got negative NPV of 48 alhamdullelah. I have one comment on question one answers.. the contribution (sales less V.C) is missing from the answer.. look at june 2013 answers.. it is there in the examiner’s answers. Thanks
You can show contribution if you want, but there is no requirement to show it – there is absolutely no need (and there will be no extra marks for showing it).
My answer to Question 2 will be uploaded very soon.
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Hi John,
Where are the answers posted as I cannot seem to see them.
Thanks
Matt
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i wrote only q1a ,2, 3 and 4 but i wasnt sure with 4d. i dont know my chances of passing this paper.
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Thanks Daniel
Answers to Q2 is now available on Open Tution WEB SITE.
Thanks John, looking forward to Q3 & Q4
answers.@ erabruce follow the link below
My answer to question 3 will be posted within the next hour.
Only question 4 left 🙂
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