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Forecasting cash flows and capital investment appraisal

Forums › FIA Forums › MA2 Managing Costs and Finance Forums › Forecasting cash flows and capital investment appraisal

  • This topic has 6 replies, 5 voices, and was last updated 4 years ago by Ken Garrett.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • December 27, 2018 at 5:09 pm #499337
    kash52741
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    I would like a lecture videos in depth covering these two topics

    December 28, 2018 at 10:09 am #499389
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    Try here:

    https://opentuition.com/acca/ma/acca-management-accounting-ma-lectures/

    Chapters 17 and 23.

    The syllabus is not quite the same as yours, so exercise care.

    February 14, 2019 at 3:23 pm #505129
    Luqman
    Participant
    • Topics: 2
    • Replies: 6
    • ☆

    An individual is to receive an annuity of $5000 for ten years,at the end of each year.The present value of the annuities is $33,550. What is the cost of capital(r)?
    a) 2%per annum
    b) 4% per annum
    c) 8%per annum
    d) 16%per annum

    February 15, 2019 at 8:20 pm #505243
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    33,550 = 5,000 x cumulative 10 year discount factor at the cost of capital (CDF)

    CDF = 33,550/5,000 = 6.71

    So look at your 10 year annuity/cumulative d/c factors until you find 6.71 and read off the discount rate.

    April 19, 2019 at 8:22 pm #513539
    7ttaa
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    This is so fascinating.

    March 19, 2021 at 11:26 pm #614804
    Ivaislami@
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    hello Open tuition ,
    Can you help me with these questions please?

    1. After allowing for inflation, revenue in the first year following the investment is
    expected to be £25 billion. Thereafter it is expected to grow at a real rate of 6%
    per year, and the rate of inflation is expected to be 2½% per year.

    a) how to calculate the sales revenues for 3 years?

    March 20, 2021 at 9:11 am #614829
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10594
    • ☆☆☆☆☆

    If there were no inflation, the revenue would grow by 6% pa as you go from year 1 to 2, then 2 to 3.

    Revenue for year 3 = £25B x 1.06 x 1.06 = £28.09B

    On top of that there is also inflation: revenue must grow by 2.5% pa just to keep still in real terms.

    Therefore the revenue (cash) expected for year 3 is:

    28.00 x 1.025 x 1.025 = £29.51B

  • Author
    Posts
Viewing 7 posts - 1 through 7 (of 7 total)
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