• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

ACCA December 2022 Exam results:
* Pass rates * Comments * Instant Poll * Competition *

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

intrests

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › intrests

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 22, 2015 at 3:44 pm #278424
    mujahidaslam
    Member
    • Topics: 16
    • Replies: 3
    • ☆

    What is the present value of $2,000 per annum, first receivable in 3 years time and thereafter each
    year for a total of 8 years, with interest at 5% per annum (to the nearest $’00?
    A $11,700
    B $10,000
    C $12,900
    D $11,200

    Good evening sir
    i have solved this question and i have got the answer but my concept is still not clear sir i wanted to ask hat in this question you are minusing the annuity rate of 10th year from the second year but sir i have done another question from some where else of annuities in which we were given the initial investment and annual cash flows so in that question they were multiplying the npv of future cash flows back to the commenced year with the value of present value table like if it is started in year three so to discount back to year 0 they were multiplying it to present value f yr three sir please make my concepts clear so that i may not do thee types of mistakes again
    Thank you 🙂

    October 22, 2015 at 5:12 pm #278447
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    The amount are receivable from time 3 to time 10.

    There are two ways of doing it,

    You can use the annuity factor for 8 years multiplied by the normal discount factor for 2 years (because the flows start in 3 years time instead of 1 years time – so 2 years later)

    Alternatively, you can use the 10 year annuity factor less the 2 year annuity factor (so as to leave a total factor for 3 to 10).

    Both ways will give the same answer. (In fact they will be a little bit different because the tables are rounded to 3 decimal places, but that does not matter in the exam – for that reason most questions ask for an answer to the nearest thousand 🙂 )

    October 22, 2015 at 5:29 pm #278452
    mujahidaslam
    Member
    • Topics: 16
    • Replies: 3
    • ☆

    thank you sir i got this but i wanted to ask that i have seen another question in which the return is starting from yr 6 for three years and in that question the annuity rate is been taken for the cashflows is of three year means of the third year and after that to discount back to yr 0 they are taking its present value of the same percentage and of the same year not the annuity value please explain this

    October 23, 2015 at 7:17 am #278494
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    I can’t explain without seeing the actual question.

    The only ways of dealing with annuities are the two ways I wrote before – either way always works and there is no other way.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • John Moffat on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • John Moffat on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • palbu on Basic group structures – Impairment – ACCA (SBR) lectures
  • AkilaShaikh on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • AkilaShaikh on Capital asset pricing model (part b) – ACCA Financial Management (FM)

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy