*** June 2023 ACCA FM exam – Instant Poll and comments ***

My exam was a disaster. I felt like i did not study anything.
Had a question asked to calculate tax rate at which npv is 0
I ended up calculating irr bevause i dint know how to calculate sensitivity for tax rate. Let me know if someone got the similar question?
Alot of theoretical mcqs.
Everything was from risk management and working capital. Tricky questions.
Too much theory marks for section C

Same here. I got the sensitivity Analysis too. Question below

2a. Calculate Sales Volume and Discount Sensitivity analysis. (7 marks). I personally found this challenging.

2b Calculate and Discuss impact of tax on SA (3 marks). Couldn’t answer this as well. I guess 2a affected my confidence on this part of the question as well.

2c Discuss on the comments of Llywn Co CEO on Sensitivity Analysis. (6 marks). The CEO was discussing on the limitation of SA. So I tried to buttress what he had already said by briefly talking on the Disadvantages of SA. Listed 3 points and 2 statement each per points.

2d. Discuss limitation of llwyn Co on accessibility of finance. (4 marks). I made a generic comment and discussion on this. Cos there was no information related to this question on the scenario. Asides the company didn’t want to source for additional finance either Debt or equity. So I just listed two points. Business Decisions and High Gearing. Tried to build on those two.

Asides this. I found part 1 of section C easy.

Section A and B were tricky!!! I really do hope for a pass

For the question about limitation for finance I commented on hard and soft capital rationing as the economic climate was volatile and their sales forecast was said to not be accurate

has anyone got wacc and lease vs buy in section c

also had the analysis re discount, volume and tax.

for the volume i have used the contribution and removed the tax.
for the discount i used IRR
for the tax i just changed the tax rate to see when it made the NPV £0 I have entered the NPV calculation in excel though

the section c was horrible in that sense but also section b and a weren’t easy!

some of the questions never seen before, and i went i entered the exam i felt very confident..

Pecking Order Theory. I believe –

1) Retained earnings
2 Bank Loan
3) Stock Loans
4) Equity

I was surprised by the presence of Bank Loans but decided that Bank Loans are shorter than Bonds and cheaper which will reduce the WACC.

Am I right?

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Yeah i had the same question and this is the exact order i put so hopefully its right! pretty sure equity is the lowest in terms of financing while retained earnings & loans were further up th chain due to their lower costs.

Feeling grateful i missed that sensitivity analysis 20-mark question some people had. sounds ridiculously tricky. For section C i got a mixture of working capital management (Cash Operating cycle/Miller Orr & Discussion on trade recievables & NPV/investment apprasial+capital rationing.

I also got the same Section C
a) Sensitivity analysis on Sales Volume, Discount rate and then tax rate at which NPV=0 (IRR was coming at 18.5%)
b) The other one was on decision of usage of factoring. Not sure if we should have used factor or not? And then discussion on Working capital long term and short term.

Section B had
1. Difficult question on two sisters owning an unlisted company. Brother wanted to invest using debt etc. Found it diffcult. It had a Qn on mushakara.Theory was super confusing
2. Another case on forex 6 month loan interest payable in Pesos Vs USD.
Money market Vs Forward.

Fingers crossed, Hope they give grace marks. Last time failed at 44 marks 🙁

Do you remember answer of factor’s offer question?

Same I also got a net cost but do you know precisely what was the answer?

Okay

How did you find SBL?

The sensitivity analysis is very hard for me, I have thought very hard but haven’t got an idea to calculate the sales volume of year 4, the discount rate of course.

The question is quite tricky, I have already studied for quite long time on it, but I think I will fail again….