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My only mistake in this question was that i forgot to deduct scrap value from capital cost
1 D
2 D
3 B
4 A
5 B
6 D
7 D
8 C
9 C
10 B
11 D
12 D
13 B
14 D
15 B
16 D
17 C
18 D
19 D
20 AYes I think they should only be worth 1 mark each as well, 0 or 2 is a bit harsh.
What I want to know is how these people remember exactly which option they chose for each MCQ to repost their answers in here!
@jparker7 said:
Yes I think they should only be worth 1 mark each as well, 0 or 2 is a bit harsh.What I want to know is how these people remember exactly which option they chose for each MCQ to repost their answers in here!
I was about to ask the same thing. It’s been bugging me since Monday (same happened after F5). The rest of us can’t even remember the questions properly let alone whether we put A or B etc!
Methinks perhaps some people have managed to leave with the question papers??? All I can think of or they have phenomenal memories!
@jenny3549 said:
I was about to ask the same thing. It’s been bugging me since Monday (same happened after F5). The rest of us can’t even remember the questions properly let alone whether we put A or B etc!Methinks perhaps some people have managed to leave with the question papers??? All I can think of or they have phenomenal memories!
or saved answers in their calculators ^_^ my guess is 1 for A, 2 for B ……
Section A seemed fair
The only straight forward questions were Qn 1 and Qn 3
Though its like I made some stupid errors with question 1.The rest of the questions were really hard especially Qn 4 & Qn 2
Qn 5 I got 29 as the expected value for selling price which I inflated to the sales units to getting the selling price.
Hope it was the right approach.All in all, the paper was HARD
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Withe the NPV question the sp was 29 with a yearly inflated rate of 4%. The variable cost was just same figures bcos of the nominal rates. The incremental fc was to be inflated , I guess. I am also guessing that the tax savings was 375 for 3 yrs n then 225 or so for the fourth yr.. I felt the factor was not viable bcos it was a factor with recourse n the bad debts of 1% was not that much relative to the 0.75% fee. Plus all the other charges. The MCQs was just too tricky n I guessed thru a quarter of them. Question 4 was too unwieldy, just couldn’t get my way out I did calculate the TERP n then TSR. Not sure if I was messing up. In all I am sure I can pull a pass.
@marionah said:
Section A seemed fairThe only straight forward questions were Qn 1 and Qn 3
Though its like I made some stupid errors with question 1.The rest of the questions were really hard especially Qn 4 & Qn 2
Qn 5 I got 29 as the expected value for selling price which I inflated to the sales units to getting the selling price.
Hope it was the right approach.All in all, the paper was HARD
Wow, you’re the only person so far to think Section A was fair!
You’re fine on Q5 – it was $29 for the selling price and then inflated.
@f4sj said:
or saved answers in their calculators ^_^ my guess is 1 for A, 2 for B ……Didn’t think of that as we keep being told can’t have calculators which can store data.
The problem then though, which is why no-one answers those posts, is no-one else can remember which question was which so can’t really comment on a list of letters.
But at least you’ve solved the mystery!!!
@jparker7 said:
No because the after tax discount rate given was stated it was the nominal value (I.e. money terms) and was already inflated.We had to inflate the selling price of 29 by 4% each year and also the incremental fixed costs by the other perecentage (5% or 6%).
I imagine the main errors made on this question was:
– Inflating the variable costs, we didn’t have to since they were already nominal monetary value.
– Doing the tax in arrears, the question they pay tax in the year the liability arises.
– Doing a balancing allowance for CA, as it was straight line there was no Balancing Allowance.On the tax savings on capital allowance… Should your depreciation charge not be cost less scrap value divided by useful life? Because, if I used your method above, at the end of the useful life, I won’t have a scrap value. Which I considered in my cashflow. So you expect the tax man to ignore the 500k scrap value at the end of the useful life?
@jparker7 said:
Yes I think they should only be worth 1 mark each as well, 0 or 2 is a bit harsh.What I want to know is how these people remember exactly which option they chose for each MCQ to repost their answers in here!
The trick is, you use ur docket and just copy down your multiple choice on it with a pencil and when you get home put it on a paper. After that just erase it and you will have the answers to your multiple choice so when it comes out you have a clear idea if you’ve passed or failed. Hope that helps 😉
MCq’s were tough for me, every answer seems to be true 😛
Overall paper went OK, did not write much in theoretical section 🙁
Darex – you subtract the scrap value and then depreciate straight line.
I.e. 5m minus 500k, depreciate 4.5m over 4 years equalling a depreciation of 1125 each year.
The tax savings are therefore 338 each year, with the remaining balance on your capital allowance workings being 500k, the resell value when you depart ownership of that asset.
Kadir – Ah makes sense now, though I don’t think I’d want to do that, I’ll just wait and pray on the 1st August!
@jparker7 said:
Darex – you subtract the scrap value and then depreciate straight line.I.e. 5m minus 500k, depreciate 4.5m over 4 years equalling a depreciation of 1125 each year.
The tax savings are therefore 338 each year, with the remaining balance on your capital allowance workings being 500k, the resell value when you depart ownership of that asset.
Kadir – Ah makes sense now, though I don’t think I’d want to do that, I’ll just wait and pray on the 1st August!
Thanks Jamie… That was what I did… I was just trying to clarify what Parker said
Correct me if I’m wrong but I don’t believe you incorporate interest into an NPV appraisal. Since the cost of capital (discount rate) already incorporates this.
Yup…you don’t…That’s one of the purpose of the COC used to discount the cashflow. One of the examiner’s comment in the last exams….I can’t remember which also provides clarity
NPV q…I inflated variable costs like a wally! I saw ‘overheads’ and ignored ‘nominal’ *palm to face*!
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USD29 is correct 🙂
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@mfc2476 said:
what did people get for the forward exchange and money market hedge?Choice for forward hedge market
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