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june 2012 biscuits and cakes- question 5

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › june 2012 biscuits and cakes- question 5

  • This topic has 7 replies, 3 voices, and was last updated 7 years ago by John Moffat.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • June 7, 2016 at 2:55 pm #320346
    vandananair
    Member
    • Topics: 8
    • Replies: 9
    • ☆

    sir in june 2012 biscuits and cakes in part d)last line says that residual income of investment alone is negative that is (132000 – 212000)= 80000 how did they get these figures 132k and 212k?

    June 7, 2016 at 3:35 pm #320386
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    The contribution increases by 8.5%, so a total of 8.5% x 600 x 12 = $612 p.a.
    There is extra depreciation of $480 p.a.
    So extra profit = 612 – 480 = 132.

    The notional/imputed interest = 10% x $2120 = 212

    June 7, 2016 at 3:59 pm #320408
    vandananair
    Member
    • Topics: 8
    • Replies: 9
    • ☆

    Thank you sir 🙂

    June 7, 2016 at 5:36 pm #320468
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    You are welcome 🙂

    November 22, 2017 at 5:24 pm #417462
    angelaht
    Participant
    • Topics: 1
    • Replies: 4
    • ☆

    Hi Sir, I just have a quick question about the solution for question 5 in June 2012. In the solution for question 5-c, it mentioned that the cost of capital is lower than the target return on investment. Where can I get the figure for Target Return on Investment?
    Also, in the question like this about RI – asking if they perform well, what should I compare to?
    Many thanks,
    Angela

    November 23, 2017 at 8:59 am #417544
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    The second paragraph of the question says that the target TOI is 20%!

    With regard to RI, there is not a target – it is increases they have done well, if it falls then they have not.

    Have you watched my free lectures on this? The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.

    November 23, 2017 at 11:54 am #417566
    angelaht
    Participant
    • Topics: 1
    • Replies: 4
    • ☆

    That’s perfect. I got it now. Thank you John

    November 23, 2017 at 2:58 pm #417611
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    That’s great 🙂

  • Author
    Posts
Viewing 8 posts - 1 through 8 (of 8 total)
  • The topic ‘june 2012 biscuits and cakes- question 5’ is closed to new replies.

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