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Could not have asked for a better exam. Got a question on NPV calculation with, then first question on swaps, and some NPV calculation and BSOP which i could not attempt completely as my exam shut down when i had 48 minutes remaining. Was not able to do swaps and other commentary parts around 20 marks worth exam. Really pissed off about it but hoping to get marks due to mitigating circumstances. As i was making such good time. I would have completed the exam in its entirety. Cant remember what the second question was but attempted it completely. I think it was netting and futures and swaps.
Disastrous exam form me.
1)Asked all the interest rate hedging options except Swaps for both interest rate increase and decrease
And all that for just 17 marks. And then evaluation of the same for 6 marks I think. Asked entire question as a report rather than dividing them into individual theory and report like Exam kit. Green finance was asked in the report as well.2) Second question was WACC question,involving with new 10 year issue of bonds having -bbb rating with credit spreads for only 5 years. And theory about credit rating agencies and factors affect credit rating
3) didn’t even get time to read the whole question. A reconstruction scheme was given and SOFS after reconstruction was asked. Also the effect the interest coverage ratio after the reconstruction proposalMine seemed quite NPV heavy. I wasn’t sure how to use the BSOP calculator on Q3 though, wasn’t sure what value to use for Pa and Pe?
Q1 was on projects and FX – struggled a bit as FX is not my favorite topic.
Q2 was on M&A with pro and cons .I don’t think it was a disaster but could have been better for sure.
I got the same exam as aauchohan. The second question was about intra-group netting, then how to hedge receipt from the sale of a subsidiary (forward or futures). Calculations + comments. Then perhaps something else, but I don’t quite recall.
I got the same.
Q1 Green finance and interest hedging.
Q2 rewacc and valuation
Q3 reconstruction. This was very difficult. From excel redoing the SOFP so hard with bonds and loans.I’m just that I have finished all the exam. Apart this very frustrated about the reconstruction question.
Finger crossed!Could you please tell me that is question 1 was about borrowing 48million or receiving 48million
And time period of borrowing was 8 months ?Could anyone please tell me that was question 1 about borrowing 48million or receiving 48million
And time period of borrowing was 8 months ?Really a disaster to me, first professional exam for me, prepared for it very well, but everything blanked out when so much of information came out, forgot some basic things like forward and futures in question was for few months but i forgot to divide that, most of the paper was filled out with risk management questions, theory was too difficult, was in pressure due to time running out, just one multilateral netting was lifesaver that i could do, covered everything but i don’t think it was enough
I remember question 2, to calculate NPV, a company can claim 100% tax allowable depreciation of non-current assets. But I donot understand it. What does it mean that the 100% of depreciation in the first year of project?. I remember that the relisable value is 5m
i think it is time for me to give up on acca.
i don’t think i can handle this shit any more.“I remember question 2, to calculate NPV, a company can claim 100% tax allowable depreciation of non-current assets. But I donot understand it. What does it mean that the 100% of depreciation in the first year of project?. I remember that the relisable value is 5m”
It means that the 60m (if I recall) of the investment was to be deducted as TAD in the first year, and not over the x years of the project. The impact was that taxable profit was heavily negative in the first year, but this loss could be carried forward in the following years, and so would reduce taxable profit in those year. Cumulative taxable profit over the life of the project would be the same as with, say, straight-line depreciation over the life of the project, but timing of those profits would be different, and so would the discounted value of each year’s cash flows.
“It means that the 60m (if I recall) of the investment was to be deducted as TAD in the first year, and not over the x years of the project. The impact was that taxable profit was heavily negative in the first year, but this loss could be carried forward in the following years, and so would reduce taxable profit in those year. Cumulative taxable profit over the life of the project would be the same as with, say, straight-line depreciation over the life of the project, but timing of those profits would be different, and so would the discounted value of each year’s cash flows.”
I know there is some chance that I have full score if i understand differently the exihibit content, for example if inflation from year 2 but i put the inflation from year 1. In this case due to time pressure, I put 100% of the depreciation in year 4. Is there any chance that I can score fully?In that case, I don’t think so, since the text said that 100% of the TAD was in the first year (not in the 4th – which would not make much sense to begin with anyway). You will only lose a mark or so, though, depending on the marking scheme.
I remember problem 2 which ask to calculate the price for acquisition of a company with SPAC. SPAC will buy 60% of the company. In this case I donot remember are there debts attached to that company when megers with the SPAC. Anyone can help me?
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