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Is rounding important?

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Is rounding important?

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by P2-D2.
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  • Author
    Posts
  • February 25, 2019 at 4:57 pm #506495
    thnguyen
    Member
    • Topics: 15
    • Replies: 9
    • ☆

    Dear Sir,

    I have been practicing the revision kit for both Kaplan and BPP, Andy there is differences with the rounding, which gives us a different answer.

    For example, in question 24, page 9 of BPP revision kit, the fund for construction of asset was pooled from 2 outstanding loans:

    9% £15M loan
    11% £24M loan

    The company withdrew £6M on 1 April 20X8 and an additional £2M on 1 August 20X8.

    Question: Calculate the capitalised Borrowing Cost.

    A £549,333
    B £411,999
    C £750,000
    D £350,000

    The answer is A (with WA rate of 10.3% – which was rounding from the equation below).

    However, if you put the whole equation in the calculator (9%*15/39 + 11%*24/39), they will give you a rate of 10.23%, and subsequently give an exact result of £545,600.

    So in the exam should we use rounding instead? Because sometimes the exam may give us closely matching results.

    Many thanks

    February 25, 2019 at 9:55 pm #506523
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7198
    • ☆☆☆☆☆

    Hi,

    Don’t stress about rounding in the exam as it will not give you the wrong answer in any of the questions. Just use something sensible and you will be fine.

    Thanks

  • Author
    Posts
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