APM*** P5 June 2014 Exam was.. Instant Poll and comments ***

I wonder if the examiner knows how It feels to study hard, take no pay leave, come home every evening to study, sacrifice things you want to do and places you want to go, save money to pay for exams etc?? Has he no heart? Of all the papers P5 has the LOWEST pass rate...can't he see that?? Why should P5 students be soo bummed about their exam when the other P-paper students are rejoicing??? This was supposed to be my last exam and that paper was disastrous? Is one of his CSFs "to keep pass rates down" and his KPI "% of students that fail"??? Is this really for money?? Something has to be done!!! ACCA needs to reassess how fair this paper really was before marking students. What's also unfair is that one bad question can throw off your thinking in the entire paper....THIS IS NOT FAIR! I thought after exams I could relax but now I'm most depressed........Congrats Mr. Examiner on a job well done!

Dear Sir I have been asking is there any plan of ACCA to conduct resits after 3 months this Year. So that we can shrug off our depressed thoughts and brace again to face ACCA resit in September 2014. But is there any plan from ACCA for such resits. Kindly throw light if anyone has any idea about resits ! Deep

they are planning to do 4 sessions at the end of 2015 or start 2016 no chance to get this "benefit" this year.

Question 1 is really shocking bcoz VBM and to calculate EVA. Rest was good ..may cross this time

I also did the variance question. Praised them on operational versus planning variance as it will help in identifying whether or not the managers were efficient. Despite all that there were issues the annual budget brought as the environment was changing constantly. For e.g. quarterly changes in price made it a very dynamic macro environment and thus required to flex the budget to give a better comparison. Also, limited participation from managers due to command and control which staff seem to be happy doesn't really seem to help as the managers waste so much of useful time listening to things for which they could not contribute. Thus the budgetary process was virtually non-value adding.

I totally love the way you applied CSFs and KPIs on the examiner himself!

I got negative Eva aswell

In Q1 for WACC calculation there was note : debt/equity 30%. I wonder how this should be assumed equity 30% and debt 70% or equity 70 and debt 30? ?? I never met that it is not clearly stated, in all previous questions it was explicit ratio ((( so took time to figure out

I treated debt:equity as 3:10 and took 3/13*cost of debt after tax + 10/13*cost of equity. Got 12.59% as WACC. I think debt to equity is different from gearing which is debt to total capital employed. Anyone with a different view?

well done ACCA keep on setting this type of Q .. n one day u would be the richest profession in the world ...100 pounds gone,,,,,,

Abdullahmv, my WACC was 13 something %, I also weighted equity by 100/130 and debt by 30/130, but I think cost of debt was given pre-tax, therefore cost of debt for WACC was kd x (1-T). Can you remember whether cost of debt was pre-tax? I do remember precisely though, 30% gearing was debt to equity.

Pre-tax cost of debt was provided. Tax was 25%. Cost of debt, pre-tax was 6.5% and cost of equity given as 15%.

Abdullahmv thanks for the details. Meaning WACC is: Equity: 15% x 100/130 = 11.54% Debt: 6.5% x 0.75=4.875% x 30/130 = 1.125% wacc: 12.665% Looks like your WACC of 12.59 is closer then mine of 13 something:-) Good luck anyway.

You don't have to remember the thing, the exam paper is now uploaded on the ACCA website. https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p5/exampapers/P5-2014-jun-q.pdf Pre-tax it was. I can't recall if I took 30/130 or 30/100, nevertheless my WACC was also somewhere around 12.5% or so. The EVA calculation I found tough, because there was not many ways to arrive at a figure for say, impairment of goodwill, or economic profit. I hope the examiner gives credit for my attempted calculation!

exactly, might as well have a whole news paper... they make us feel like giving up

Is pre tax not already with tax removed? You shouldn't jhave put 1-30. I got 7% WACC ! Please someone say you got the same! :)

I've messed this up aswell? I calculated WACC as: (15.7% x 30%) + (6.5% x 30%) = 7% WACC ?

Hey "fenechbrian" I did a similar thing to you but I adjusted for the tax in the cost of debt part. Kicking myself didn't read the 30% debt/equity bit carefully.

Dammit!! Because I thought that d/e has already taken into account the d/d+e or other way round. I'm going to fail with flying colours! :)

For that part I would imagine you would get loads of half marks for stating assumptions and components for EVA. So WACC marks would probably be worth 2-3 marks max. So not lost yet.

Just to prove it's all about the wording! In real life you just clarify this! .. Pointless tricks!

Could those who tried Q2 share how they calculated the economies of the pilot BPR project?

I got same 12...somfing...as wacc, but could not find information for the marketing to capitalise and so was silent on that.

pre tax means before tax, which means tax is yet to be applied and therefore has to be applied...I guess buck of the marks for the eva calculation will lie on calculating the wacc.

ROTFL....

They are both 13% to the nearest whole percentage.

Does anyone think Acca would be lenient on the marking because of ambiguity of some questions especially question 1a?

Sharon..While I agree with the ambiguity of most of the questions, question 1a was a mirror image of question 1a in june 2012 exam so examiner will argue we should have looked at past questions etc...damn!

It's a hard case challenging the ambiguity of question 1a), I know in hindsight it's alot easier than in an exam pressure situation but checking the exam question again I think it is clear what the requirement is. Evaluate the performance report (strengths v weaknesses) rather than Evaluate the current performance of the Company. I only figured this out after checking the financial information provided in the question and realising that there is not much to comment on given 1) lack of financial data provided and 2) budget v actual variances were minimal in the report

What did people put for question 1(ii) about the fixed and variable costs. Wasn't sure how to answer it.