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P4 Sample Question 1- Fly400

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › P4 Sample Question 1- Fly400

  • This topic has 3 replies, 2 voices, and was last updated 13 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 24, 2012 at 3:41 pm #55701
    delfia
    Member
    • Topics: 2
    • Replies: 12
    • ☆

    Please help.
    Calculate the value of the growing perpetuity at the end of year 6 (note the timing of the year is important) using the expected
    FCFE in year 5. This gives a value at year 5 of $1,785.73. I am not getting
    $1,785.73

    November 25, 2012 at 8:53 am #108586
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    FCFE at time 5 is 118.48, g = 0.04, and r = 0.109

    If you put these in the formula you get 1785.79.

    November 25, 2012 at 4:39 pm #108587
    delfia
    Member
    • Topics: 2
    • Replies: 12
    • ☆

    FCF (1+g) /r-g. Thank you for the help.

    November 25, 2012 at 7:39 pm #108588
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
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