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open tuition revision mock ANDRIS-financial instrument

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › open tuition revision mock ANDRIS-financial instrument

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 1, 2015 at 5:05 pm #286790
    amna
    Member
    • Topics: 92
    • Replies: 93
    • ☆☆

    sorry i can’t copy paste the question.Hope your know which question im referring to.

    shouldn’t the answer for that question be:

    equity $2,925,000
    NCL $9,075,000

    THE PRESENT VALUE OF DEBT BEING:
    per $100

    interest (5 x 2.55) 12.75
    redemption ( 100 x 0.78) 78
    TOTAL 90.75

    therefore equity being (1,200,000 – 9,075,000) 2,925,000

    and NCL at initial value of 9,075,000

    December 1, 2015 at 6:13 pm #286805
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22702
    • ☆☆☆☆☆

    The debt appears to be a 5% instrument with a face value of $100

    So why is there an amount of $120 from which the apparent present value is being deducted? Shouldn’t that be $100 from which $90.75 should be deducted?

    December 1, 2015 at 6:28 pm #286811
    amna
    Member
    • Topics: 92
    • Replies: 93
    • ☆☆

    can you please show me the working for it?
    im confused

    December 1, 2015 at 6:37 pm #286816
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22702
    • ☆☆☆☆☆

    That’s difficult – I don’t have the question. My response was derived applying intuitive common sense to the limited information that you provided so, no, I can’t show you my workings unless you show me the question!

  • Author
    Posts
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