FM*** March 2022 ACCA FM exam – Instant Poll and comments ***

Yes the npv was positive there was no tax and working capital changes so it should be positive as u only had to solve the question upto cash flows before tax and apply discounting rate

adamek144 wrote:I got positive NPV too but I did the working capital the wrong way round – included it as inflow in Y0 and as negative in Y3…. I also only included fixed costs of 6m every year (not sure that’s correct), which resulted in operating loss in Y3 and hence no tax on profit, which threw me and I think I’ve done something wrong…..<br>Has anyone got that?

I initially got an operating loss in Y3 too and it threw me. The fixed costs are correct. I had to adjust the expected sales volume in Y3 (75% decline from Y2). I initially had about 4,900 units (~19000*0.25) but I had to revise that to about 11,000 units (~19000/1.75) which led to an operating profit.

Section C: 1. Factoring with recourse and early payment discount offered to customer. 2. NPV, IRR, payback period and ROCE. For those who had this exam can they remember the NPV and IRR they got? For the NPV, I got over 13K (cant remember exact figure) and for the IRR I got over 17% (again can't remember exact percentage)

That was SUGAR SUGAR