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Practice Mock

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Practice Mock

  • This topic has 5 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • November 15, 2018 at 2:53 pm #484909
    abdchohan
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Sir Can You Explain The Question# 1 Sec B part b & c

    IRR & Payback period
    I can’t seem to solve it

    I’ve watched all your lectures maybe I’m missing something
    Can You provide me a solution

    November 15, 2018 at 4:33 pm #484925
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    Part (a):

    Outflow at time 0: (300,000)
    Net inflow of 90,000 per year (120,000 – 30,000) for 5 years, so multiply 90,000 by the 5 year annuity discount factor at 10%.
    Inflow at time 5 of 20,000, so multiply 20,000 by the present value factor for 5 years at 10%.

    Part (b):

    Net cash flow = 90,000 p.a.
    Depreciation = (300,000 – 20,000)/5 = 56,000
    So, average annual profit = 90,000 – 56,000 = 34,000.
    Average investment = (300,000 + 20,000) / 2 = 160,000.
    Therefore ARR = 34,000/160,000 = 21.25%

    Part (c)

    Net cash receipt = 90,000 per year.
    Therefore time taken to get back 300,000 = 300,000/90,000 = 3.33 years

    Part (d)

    If you have watched the lectures then I am surprised you need an answer given for this question!
    The IRR of 13% is more that the cost of capital of 10%, and therefore the project will have a positive NPV.

    November 16, 2018 at 2:20 pm #484992
    abdchohan
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Thanks a lot Sir
    I’ve scored around 70 in practice Mock you provided
    Do you think it’s enough for the exam???
    I have my exam on 27th this month..
    I’m really worried about my exam

    November 16, 2018 at 6:36 pm #485025
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You are welcome.

    70% is certainly more than enough. However, it would be better to get hold of a Revision Kit from one of the ACCA approved publishers – they contain lots of exam standard questions, and also more mock exams. Just one mock exam is not enough practice because there are so many different ways that the examiner can test the topics.

    November 17, 2018 at 12:05 pm #485067
    abdchohan
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Do you recommend ACCA approved mocks which we have to purchase from tha ACCA website?
    I’m already done with the revision kits both bpp and kaplan
    Thanks a lot Sir
    You’re really boosting my confidence

    November 17, 2018 at 5:20 pm #485085
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    I don’t really think there is much point in paying for the mocks on the ACCA website.

    The approved publishers are BPP and Kaplan, and if you have done the mocks in their Revision Kits, then you don’t really need any more 🙂

  • Author
    Posts
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