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F9 Mock revision questions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › F9 Mock revision questions

  • This topic has 5 replies, 3 voices, and was last updated 10 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • May 29, 2015 at 9:33 pm #250364
    sarahf
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    Hey

    Just wondering if you can help me with a couple questions, just found this site, a little too late unfortunately!

    1. BI has in issue 8% irredeemable bonds quoted @ 86% ex. int. rate of corp tax 25%
    calculate cost of debt?
    Ans 6.98%

    2. LJM considering investing in a new project, cost 160k. expected life 4 yrs, scrap 20k. anticipated c/f year 1 40k year 2 60k year 3 80k and year 4 20k
    cost of capital 10%
    calculate ARR(accounting rate of return)?
    Ans: 16.67%

    3. Forecast sales 200,000 and will increase 5% each month. All sales are credit, 60% pay after 1 month and rest after 2 months. Calculate receipt budgeted for May?
    Ans $204,000

    4. AJT gearing ratio (Debt: Debt+Equity) of 30% & pays CT 30%. Has asset (ungeared) beta of 1.2 Rf 5% Erm 12% calculate cost of equity?

    I know you may not be able to answer all these for me as you have so many queries to answer. I have gone through a lot of the topics but can’t find these ones. You mentioned free lectures on topics but couldn’t find these either?

    Thanks for any help, I am really struggling with this subject 🙁

    May 30, 2015 at 9:18 am #250452
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54687
    • ☆☆☆☆☆

    If you go the main F9 page, there are free lectures covering the whole of the F9 syllabus (including what is asked in all the questions above!)

    1: (8 x 75%) / 86 = 6.98% (this is covered in the lectures on cost of capital)

    2: total cash receipts = 200; total depreciation = 140. Therefore total profit = 60; therefore average profit = 15 per year.
    Average investment = (160 + 20)/2 = 90
    So ARR = 15/90 = 16.67%
    (This is covered in the section on investment appraisal)

    3: The receipt in May will be 60% of April’s sales plus 40% of March’s sales.
    (This is covered in the lectures on working capital management)

    4: You use the asset beta formula (backwards) to calculate the equity beta. So the equity beta = 1.2 x (70 + (30 x 70%)) / 70 = 1.56
    You then use the equity beta in the normal CAPM formula to get the cost of equity.
    (This is all covered in the lectures on CAPM)

    May 30, 2015 at 12:09 pm #250517
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 2
    • ☆

    beta plc pay dividend $ .40 per share. dividend growth is 5% per annum share holder required rate of return is 20%. what is current market value

    May 30, 2015 at 2:51 pm #250622
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54687
    • ☆☆☆☆☆

    Please do not ask the same question in two different places. I have just answer the other identical question you posted!!

    June 1, 2015 at 5:02 am #251170
    sarahf
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    Thanks john. I figured a few of them out over the weekend after more digging through this website. It’s been a lot of help. Thanks again!

    June 1, 2015 at 8:31 am #251221
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54687
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
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