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@lotak said:
How do the ACCA decide which questions to include in the hybrid paper?!
Of the 4 questions, 3, including Q1, are from the March 2016 paper, and only 1 optional question is included from the June 2016 paper.This is just stupid.
It should be Q1 + 1 option from one paper and 2 options from the other paper. This makes 75 marks from one paper and 50 marks from the other.Ridiculous ACCA.
Q2 & 3 in the hybrid were from June 16 and Q1 and 4 were from March 16
My friday exam was horrible,
I started with Q1 – APV. by 1 hour 30minutes, i have just finished the section A, i sticked to my time limit and left out Part B (8 marks damm it). Did some horrible assumptions on my apv computations. (i) Funds requirements for capex at Y0 and Y2. (II) Capital allowances starts from Y0 and dunno why i did a balancing allowance in the last year (III) PV of tax shield is based on funds requirements at Y0 and Y2, instead of total capacity (IV) Subsidised loan is also based on Y1 and Y2
Then Q2 – Intererest Hedging, again i sticked to 45minutes, and couldnt afford to do the 5 marks Question on how centralized the treasury department need to be. I didnt afford to explain much on the interest rate hedging methods comparisons due to time constraint, originally plan to add in 1 more method of collar, but time is just too little. T.T
Then proceed to Q3 – omgwthbbq question, again i left out the 5 marks on how is the acquiree’s PE gonna change, cause i dunno what they asking. I messed up my gearing computations cause i used book value of equity instead of market value T.T
Overall, i have left out 18 marks of questions.
I already starting my preparation for Sept 16 resit -_-
@killip123 said:
Q2 & 3 in the hybrid were from June 16 and Q1 and 4 were from March 16Yes. I just realised that.
I retract my statement.
My bad.
I was hoping I could delete the post before someone quoted it!Assuming cash flow occur at the end of the year, then beginning of year two will be the end of year one which is the same as Y1.
Q1: doing APV I got negative base case NPV and even adding tax shield and subsidy effect the total APV was also negative. Seems incorrect. Did anybody get the same result?
As for me it was on the opposite). Base case NPV was positive and tax shield and subsidy effect were about the same amount as base case NPV. But I translated tax shield and subsidy effect at average rate) Also not sure( It would be great to have a text of the question to check but …
@killip123 said:
You did the same as I did in the exam… the $6.5m NPV was for the whole project life, so didn’t need to times that by the 7 years, just needed to do the square root of 7 x 1.3^2 and divide $6.5m by the answer to give the number of standard deviations (approx 3.44) 6.5/3.44= 1.89 in the table – which is 0.4706. Add 50% to give 97.06% confident cashflows won’t be negative.I’m kicking myself now as it was 4 easy marks wasted.
I did it differently:
VaR = N (confidence level) x s x square root T
for confidence level 95% the number of standard deviations is 1.645 (from the tables)
s – annual standard deviation of project returns
T – number of years
So VaR = 1.645 x 1.3m x Sq.root 7 = $5.66m, which is potential monetary loss and is below the project’s NPV of 6.5m
So at the given level of confidence the project is worthwhile.@sergeykos said:
I did it differently:
VaR = N (confidence level) x s x square root T
for confidence level 95% the number of standard deviations is 1.645 (from the tables)
s – annual standard deviation of project returns
T – number of years
So VaR = 1.645 x 1.3m x Sq.root 7 = $5.66m, which is potential monetary loss and is below the project’s NPV of 6.5m
So at the given level of confidence the project is worthwhile.They didn’t ask for the loss at 95% confidence. They asked for the confidence level for a break even NPV. So you needed to work out the confidence level with a VaR of $6.5m
6.5m = N * 1.3m *Sqrt(7)
Rearrange to give N = 1.89Looking at the Normal Distribution table, 1.89 gives 0.4706. As its positive, add 0.5 to give 0.9706 = 97%
i thought q1 had some similar statements in a bpp kit qn called sleepon qn 88. any one who saw that?
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ONLY ONE WEEK TO GO FOR THE RESULT.LET’S SEE WHAT WILL IT BE
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