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Yes, It was a Put Option because the contract was in CHF and the payment was in $S, so we needed to buy $S in order to get the dollars we should sell CHF. (Therefore put option).
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Yes, I agree he scrap value adjusted for both taxation and inflation.
One question. for qns 3 part (c) why we value the division when tori co. is the co. target?
I think i flung that qns after reading some comments here
Q4 Black Schole model used to have calculation but this time are completely theory.. Trend drift !
anyone can sent me p4 related study material ..plz..
i have to be attempted p4 in december 2014Key board, I am sure you are through due to the simple reason that you remember even now what did you write in the exam. A person with such a fantastic memory is highly unlikely to lose an exam.
However what I do not understand is in the 2nd question you mentioned that you have calculated MIRR and discounted payback, which, as it appears from the question, wasn’t a requirement? What made you decide that was a requirement?
Can you please shed some light into it?
I thank you in advance.
I think I am not quite on the same page.
You could have saved some time to attend other questions, had you only discussed about MIRR and payback in one liner, as calculating and presenting it was not a requirement of the question and you will not gain any marks for your calculation.
The question was pretty straight forward:-
1. Calculate APV of the project, by correcting errors in the present NPV, conclude whether or not the project to be accepted or not.2. Comment on the corrections made to the NPV and explain APV approach you made and assumptions you made to arrive on APV.
I believe, even commenting about alternative investment appraisal approach is a waste of time in this specific question.
I wish you good luck
8th August could very well be my re-birth day, I have very little steam left in me for any more reappearance. And at the age of 48 I think I am over loading my brain with too many tasks and processes.
I would straight away be the member, if I pass this exam, the only one left, as all other prerequisites are completed by me in 2012 itself.
Thanks a ton keyboard! I do not know who is Sunil. Assuming he is an authority I think my answers are very close to his working. However I have attempted Q4 and not Q3.
He has not completed APV, only given base case NPV. If I remember correctly My base case NPV is around $ 10 Million positive and APV is 14 Million positive.
Hedging I also suggested forward contract, although I do not remember the figures of other methods.
Hope I pull out of this this time around, although fingers crossed
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