- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
You have no idea what i am talking about?
simple question: is a budget likely to appear in section A or B?
if you see the notes of P3 in chapter 30 point 2 says:So Project 2 then Project 1 would be done in preference, leaving $6m that would be
enough to undertake 50% of Project 3.
NPV = 6.7 + 11.5 + 0.5 x 7.7 = 22.05.-this is the part i did not understand.and in point 4
To work out the sensitivity to the discount rate, the IRR has to be calculated. So, NPV at
20%:
Time Flow $
10% Discount
factor
DCF $
0 Cost (130,000) 1 (130,000)
1 – 4 Sales 1,000 @$100 = $100,000 2.59 259,000
1 – 4 Marginal costs 1,000 @$60 = ($60,000) 2.59 (155,400)
4 Scrap 25,000 0.482 12,050
NPV (14,350)
IRR = 10 + (20 – 10) x13,875(13,875 + 14,350) = 14.9, or around 15%-this oneThis topic could appear anywhere in the exam.
Project 2 takes 10, Project 1 takes 8, leaving 24 – 10 – 8 = 6, enough for 50% of Project 3.
Working out the IRR of the project is a standard calculation for IRR, used in F2 and F9 papers. If you do not understand this, look at the F2 lectures, Cht 23.
In the future, if you are asking about a calculation, specify where it is from eg notes or a specific ACCA question. We won’t search for it if you don’t tell us where it is from.
- The topic ‘Really?’ is closed to new replies.