FMJune 2021 ACCA FM exam was - Instant Poll and comments

Heyy i forgot the question in section C but did we have to calculate wacc or just only cost of equity coz ugh i mistakenly calculated the whole wacc?

Cash operating cycle I got 41 days, Miller or model I don't remember, but did that. How did you calculate sensitive without Npv in investment ques?

I had the question about the cash operating cycle and then NPV / sensitivity in section C. I know I didn’t do them right but hoping for some follow through marks on my workings…

I got $466 npv, treated subsidy as after tax inflow. Sensitivity was 10%, npv/pv of contribution. I rounded numbers $000. Had loss in first year so tax return rather than payment. CAPM was 17% & 19%, had to degear proxy for 0.95 & regear for us about 2.4 I think then project specific cost of capital

I did exams in the evening and got very different section 3 questions the first one was to calculate NPV using real and nominal (10marks) b) discuss real and nominal c) beneifts of leasing an asset over debt financing (6marks) questions 32 WACC- only consisted on PS, loan notes and equity (10marks) b) discuss what is prohibited under islamic finance (6marks) c) Discuss uncertainity in relation to IA (4marks) My section A was more theory based Section B was forex, WCM and cant recall the last area.

Guys did anyone else got cashflow of 0 in year 1 of npv Q and did we have to use fixed costs or ignore them in NPV Q? does anyone remember their npv?

which organisation doesnot use money market? NFP organisation or SMEs or public listed Co?

i got 17.8% for the first one but the other one was lower around (11-14%) i dont really remember. what did u do after u got 0.9 asset beta? i used the values of our actual/current company to regear equity beta and then used that in capm.

do you remember the npv you got?

I got the same question sadly i left that part out thats 6marks less :(

The paper was okay for me. I had soo many confusions while attempting the exam. I didn’t really study spread and Baumol. I got the answer for return point somewhere in 26000 and with baumol 53. I got 17.8 and 11.5 for CAPM question. I thought it was wrong until I saw all the comments. The NPV question was good except it was tricky for the subsidy part. Should we include subsidies in NPV calculation after taking account of tax?

Even I did the same. But should we really consider subsidy?

Dear Admin Kindly delete my prior comment on this post as it relates to Afm and i accidentally posted here, dont want to jeopardize the feedback one is taking reading this and making true sense of FM

Hey, those are the questions I had. Do you remember when you put for WACC? My cost of debt was really low, like 2.6% , which I may think might be a little too low

For Npv I got 400 something (in $ '000) and for sensitivity 12.5% , anybody else?

My section C was NPV worth 5 marks with then some sensitivity calculations, I could do sensitivity to sales volume but could not remember how to work out sensitivity to discount factor! The other was the cash operating cycle, got 41 days. Then explain 3 ways to reduce cycle and a 6 mark question on why cash is important to a business, my answer would probably get 2 marks at the most! I also had a Miller Orr question but forgot to square the deviation and change interest rate to daily so no marks there!

Hi, did you get contribution 200 per unit ques in Npv? And how did you solve that? I got the same ques of working capital as yours and got 41 days in operating cycle

My kd was also low. I got 3.4%

How did you guys get to 41 days? I got much longer than that and now feeling a bit panicked :((

It should be around 68 days as you had to separate cash and credit sales , also raw materials had credit purchases in it so need to separate also, otherwise inventory was straight forward. It doesn't make sense to have 41 days as it defeats the purpose of the second question on how to improve working capital days.

I agree Trushal. Did you just use the cost of sales figure for inventory WIP?

did anyone get the IRR QUESTION SECTION C LAST QUESTION. iF YES WAS THERE PROBABILITY ANALYSIS IN THE QUESTION ??? OR FOR CONTRIBUTION ONLY MULTIPLY BY THE INFLATION FACTOR

ilham9089 wrote:I agree Trushal. Did you just use the cost of sales figure for inventory WIP?

Yes for inventory you have to use cost of sales, while payables was raw material credit purchases

yash07 wrote:did anyone get the IRR QUESTION SECTION C LAST QUESTION.

it was stated inflation wont affect contribution so $200 for all years

@yash07 Hi yes I got the same question where I did contribution multiply with inflation factor. I don’t get anything about probability analysis Did u get qstn in Sec c where to calculate settlement discount. I mean to offer discount or not we have to decide . That was 10 mark qstn

Did anyone got the calculation of irr using 11% and 20% discount rates in section C? What was the answer? Part b was about Discounted payback period. The second question was about decision to give early settlement discount, calculation of working capital cycle and crtical discussion of working capital policies to be adopted. What were your answers to these?

i did same but was it stated in the question that inflation will not affect contribution? i did not see that. SEE REPLY FROM TUSHAL ABOVE

was it the same irr question where u get two discounting factor %, then second part on payback (theory)

yes its good ... i did get the question on sttlement discount also

@Yash07 Yes I too didn’t see that inflation do not effect contribution. I mean I did inflation in contribution. And there were 2 discounting factor which is already given in qstn . And also settlement discount too I hope to pass