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Practice Question 4 – Ruby PLC

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Practice Question 4 – Ruby PLC

  • This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 14, 2013 at 11:23 pm #142785
    alikernz
    Member
    • Topics: 1
    • Replies: 4
    • ☆

    Hello,

    In my answer to part a, I took account of the expected level of irrecoverable debts when calculating the cost pa of offering the discount i.e. $4m x (1 – 0.026) x 2/3 x 0.01 = 25,973 (rather than 26,667 per the answer in the back).

    It wouldn’t effect the investment decision either way, but is there a reason why this isn’t included? Or am I just being pedantic!

    Alastair

    October 15, 2013 at 5:11 pm #142832
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    Its a good point and if you have done this then you will still get full marks.

    The examiner tends not to do this, but there is a good argument for what you have done and the examiner has made it clear that you would get full marks whether or not you take account of the irrecoverables when calculating the discount.

    October 15, 2013 at 8:48 pm #142856
    alikernz
    Member
    • Topics: 1
    • Replies: 4
    • ☆

    Thanks for clearing that up John. Big fan of Open Tuition, keep up the fantastic work 🙂

    October 16, 2013 at 5:20 pm #142921
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    Thanks 🙂

  • Author
    Posts
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