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Good evening Mr. John. I have a small doubt w.r.t QUESTION COPPER (MARCH/JUNE) 2018.
For the first requirement (Expected NPV), I did end up getting the correct NPV but the method I took to get it looks easy and different compared to the one that is given in the exam kit solution.
I calculated the expected cash inflows for year one($2300) and year two($2900) using the cash flows and probabilities attached to it for both the years. Then I did it the usual way, got the PVs, used the npv function and arrived at $865.
Would I still be given full marks for the approach I took to arrive at the expected NPV? Or am I doing it wrong?
You have got the right answer
Don’t worry about using a different method as long as your logic is good, you work through a question well and thoroughly you still get the marks – especially if yours is the answer given.
However, if you were to make a mistake – which can I say you haven’t!!!!!!
You would get OFR – own figure rule marks which means you can score quite highly even if your answer is wrong as long as you have answered the question using one of several methods with NPV, WACC and so on.
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