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SC Co(6/08)Bpp revision kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › SC Co(6/08)Bpp revision kit

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 15, 2016 at 2:27 pm #333313
    veverica1983
    Member
    • Topics: 36
    • Replies: 21
    • ☆☆

    Hello,

    I have trouble understanding part b) of this question, precisely how did they got 20% disc.factor?

    Thank you in advance

    BR

    August 15, 2016 at 4:34 pm #333348
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    I think you are using an old edition of the Revision Kit because this question does not appear in the current edition!

    However I have found the question 🙂

    When calculating the IRR we always need two ‘guesses’. We already know the NPV at 12% from part (a). The second guess can be whatever you want – they have chosen to use 20%.

    I do really suggest that you watch my free lectures on this (and if needed then F2 lectures on investment appraisal, because this is revision of F2). The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.

    As I explain in the lectures, using different guesses will result in a slightly different IRR (because the relationship is not linear) but that does not lose marks in the exam.

    August 16, 2016 at 8:49 am #333460
    veverica1983
    Member
    • Topics: 36
    • Replies: 21
    • ☆☆

    Thank you for help.
    I guss that they did guess, but just wonted to check ?

    August 16, 2016 at 3:30 pm #333598
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54655
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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