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@jenny3549 said:
Same here for both.Sorry, just reread that and my second answer is different to yours – the advance was based on invoiced sales, not receivables balance – but yes, overall net cost.
This factor is interesting!
I did first
Old cost
1% of 27200
5% x balance of receivablesNew cost
70% of bad debts saving
Factors fee at 0.75%
35/360 x27200 to get new receivables balance x80% x7%I think the confusion is what you’re charging the 7% on?
Now i see where Jenny and some others could face an issue. I think you calculated advance on trade receivables, instead of total credit sales
my answers to mcq
1.A
2.C
3.B
4.A
5.D
6.A
7.C
8.D
9.C
10.B
11.C
12.D
13.C
14.A
15.C
16.A
17.D
18.B
19.D
20.A@emo777 said:
You are right on 6%. Yes, we had discounted payback and it was a right option. Dont remember anything on MM. Treasury bills are on discount. Jenny did you mark money deposit as wrong?Good, I’m right on the treasury bills but, because I can’t remember the rest of the options I don’t know whether got the answer right – I hate those MCQs!!!
Which was the money deposit question?
Am so gutted ACCA aren’t going to publish the answers to these!!
@emo777 said:
Now i see where Jenny and some others could face an issue. I think you calculated advance on trade receivables, instead of total credit salesEven if I’ve done that part wrong still worth 5/7 I’d presume
They said that money deposit are short koans between organisations such as banks
@emo777 said:
Now i see where Jenny and some others could face an issue. I think you calculated advance on trade receivables, instead of total credit salesThe advance was calculated at 80% of invoices raised – ie whole revenue of $27m odd. Then interest charged on that amount at 7% so cost to us is advance x 2% (ie difference between factor interest and our interest rates).
I think that the problem is that past questions have stated that the factor advance is based on receivables balance – which I always thought was daft because that’s not the case in real life.
I’m fairly sure on this because I reread the question several times to be sure.
I give up ha!
I’m feeling a 49/100 here.Hope my MCQ guesses were good, frustrating I made silly mistakes.
Why were MCQ’s all on 1 area?@emo777 said:
They said that money deposit are short koans between organisations such as banksCan’t for the life of me remember what I put for that one. Bugger!
@jamesuk19 said:
I give up ha!
I’m feeling a 49/100 here.Hope my MCQ guesses were good, frustrating I made silly mistakes.
Why were MCQ’s all on 1 area?Exactly!!!
I thought the point was to cover a good range of the syllabus but they didn’t. Loads were left out and it was all on markets etc. Nothing like practice ones – and I did plenty!!
@emo777 said:
Fahad, 9.71 and 10.5 . Jenny, you agree?Bugger, can’t remember my figures for that one at all!!
@emo777 said:
Did you multiply it by 35/360?Multiply what by 35/360?
to get the factors advace charges I did the following;
26,500 @ 80% = 21,200
21,200 @ 2% = 424k35/360*26500000*0.02*0.8 this is the correct solution. I just checked revision kit, i think me and james got this one right
but isn’t Jenny saying that the revision kit asks you to do it on the receivables balance? whereas the exam didn’t?
This was took from bpp book and revision kit, in any case, there is only one just correct solution :))
@mfc2476 said:
but isn’t Jenny saying that the revision kit asks you to do it on the receivables balance? whereas the exam didn’t?Exactly – the whole point of these questions is not to be exactly the same each time. My calculation the same as yours.
@emo777 said:
35/360*26500000*0.02*0.8 this is the correct solution. I just checked revision kit, i think me and james got this one rightExactly what I did for the extra interest part. And I arrived at $19K net cost.
Did u use a net benefit/net cost approach? I asked bcos there is another way to do it in full by calculating all the costs in full and not just the differentials.
I’m sure some people mixed both methods up somehowReally looking forward to seeing John’s suggested answers on this one but we might have a wait if ACCA doesn’t put the questions for Section B up til next week.
Q4 – no-one has really discussed that yet (apart from the wordy bit on capital structure theory).
I had a capital loss for shareholders – how about you all?
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