,Editionm4,mVersionm1
ISBNm978-1-84808-324-0
Publishedmby
Get mThroughmGuides mLtd
.m65mBedfordmStreet mSou
thmLeicestermLE1m3JRmU
nitedmKingdom
Website: mwww.GetThroughGuides.com
Email:
Onlinemcontent mfeedback mform: mhttp://gtgtraining.com/studymaterialfeedbac
k/mFormsuggestions:
Student mSupport mForum: mhttp://GetthroughGuides.co.uk/forum
Thempublishermis mgratefulmtomthemAssociationmof mCharteredm CertifiedmAccountants mformpermissionmtomreproducem
past mexaminationmquestions mandmtheirmanswers.
Limit mof mliability m/mDisclaimermofmwarranty: m Whilemthempublishermhas musedmits mbest mefforts minmpreparingmthis mboo
k,mitmmakes mnomwarranties mormrepresentations mwithmrespect mtomthemaccuracy mormcompleteness mof mcontents mof mth
is mbook mandmspecifically mdisclaims many mimpliedmwarranties mof mmerchant ability mormfitness mformany mspecific mormge
neralm purpose. mNom warranty m may m bem createdm orm extendedm by m sales m orm otherm representatives m orm writtenm
sales mmaterial. mEachm company m is m different m andm them suggestions m madem inm this m book m may m notm suit m am part
icularmpurpose. mCompanies/individuals mshouldmconsult mprofessionals mwheremappropriate. m Thempublishermshallmn
otmbemliablemformany mloss mof mprofit mormothermcommercialmdamages mincludingmbut mnot mlimitedmtomspecial, mincident
al, mconsequentialmormothermdamages.
Allmrights mreserved. mNompart mof mthis mpublicationmmay mbemreproduced, mstoredminmamretrievalmsystemmormtransmitte
d,minmany mformmormby many mmeans, melectronic, mmechanic al, mphotocopying, mscanningmormot herwise, mwithout mthemp
riorm writtenmpermissionmof mGet mThroughmGuides mLtd.
Nomres ponsibility mformany mloss mtomanyonemactingmormrefrainingmfrommactionmas mamresult mof many mmaterialminmthis mp
ublicationmcanmbemacceptedmby mthemauthor, meditormormpublisher.
Pleasemcheck mthemback mof mthis mbook mformany mupdates m/merrat a. m Furthermlivemupdat es m/ merratammay malsombemfou
ndmonlinemonmthemGet mThroughmGuides mStudent mSupport mForummat: mhttp://getthroughguides.co.uk/forum. mStude
nts maremadvisedmtomcheck mbothmof mthesemlocations.
© mGet mThroughmGuides m2012
, Aboutmthempaper i - v
Question
Topic Name Marks PagemNumbers
mnumber
Question Solution
mbank mbank
Section A m FinancialmManagementmFunction
1 10 1m-m1 59m-m59
EPSmandmShareholdermwealthmmaximi
2 JJGmCo 25 1m-m2 60m– m62
sation
3 Multiplemstakeholders 10 2m-m2 63m-m64
Section B m FinancialmManagementmEnvironment
4 Financialmmanagement menvironment Tagna 25 3m-m3 65m– m66
5 Financialmintermediary 10 4m-m4 67m-m67
6 Rolemofmfinancialmintermediaries APXmCo 25 4m-m5 68m-m70
7 Banks mandmmoney mmarkets 10 5m-m5 71m-m71
Section C m WorkingmCapitalmManagement
8 EOQmandmreceivables mmanagement AsifcomInc 25 7m-m8 73m– m75
9 FactoringmandmInvoicemdiscounting HudsonmLtd 25 8m-m8 76m– m78
Workingmcapitalmmanagement mandmfac
10 AnjomLtd 25 9m-m10 78m– m 80
toring
11 Foreignmreceivables mmanagement SprintermPlc 25 10m– m11 80m– m81
12 Discount mpolicy mformprompt mpayment Ares mLtd 25 11m– m12 82m– m83
13 Early msettlement mdiscount PNP mLtd 25 12m– m12 83m– m85
14 Early msettlement mdiscount VelmmCo 25 13m– m13 85m– m87
15 Cashmbudget mandmBaumolmmodel ThornemCo 25 14m-m14 88m– m89
16 EOQmandmFactoring FLGmCo 25 14m– m15 90m– m94
17 Overtradingmandmfactoring DoemLtd 25 15m– m16 94m– m97
EOQm&mhedgingmforeignmaccounts mpa
17 PKAmCo 25 17m–m17 97m–m100
yable
19 EOQmmodel TNGmCo 25 17m– m18 100m–m102
Section D m InvestmentmAppraisal
20 Proposedminvestment m-mNPVmandmIRR CharmmInc 25 19m– m19 103m–m105
21 Specific minvestment mdecisionm-mNPV LeamingermInc 25 20m– m20 105m–m108
22 NPVmandmIRR PVmCo 25 21m-m21 108m–m110
23 NPVmandmIRR DuomCo 25 21m-m22 111m–m113
24 Proposedminvestment m-mNPVmandmIRR ParadisemLtd 25 22m-m23 113m–m115
25 NPVmandmproject mevaluationmstages BasrilmInc 25 23m– m24 115m–m117
26 Net mpresent mvalue Painless mCo 25 24m– m24 117m–m118
Bramblingm(Electronic
27 Sensitivity manalysis 25 25m– m25 118m–m120
s mLtd)
28 Sensitivity manalysis Umunat mLtd 25 26m-m26 120m–m122
29 NPVmandmProposedmInvestment SCmCo 25 26m-m27 122m–m124
30 3Financingmcashmflows ASOP mCo 25 27m-m27 125m–m127
, Section E m
BusinessmFinance
Financemformsmallmandmmediummsized
31 Laviniamproducts mLtd 25 29m-m30 129m–m131
mentities
32 Rights missue SmithmLtd 25 30m-m30 131m–m134
Evaluationmof mamnewmfinancialmpropo
33 ArwinmLtd 25 31m-m31 134m–m138
sal
34 Sources mofmfinance McTeemPlc 25 32m-m33 138m–m141
35 Rights missuemof mshares TranscomLtd 25 33m– m33 141m–m143
36 Evaluationmof msources mof mfinance EchomCo 25 33m– m34 143m–m147
37 Sources mofmfinance TirwenmLtd 25 35m-m35 147m–m150
38 Ratiomanalysis mandmsources mofmfinanc TFRmLtd 25 36m– m36 150m–m152
e
39 Short mtermmfinance 10 36m– m36 153m–m153
40 Islamic mfinance 20 36m-m36 154m–m155
41 DividendmPolicy AnafimCo 25 37m-m37 155m–m156
Section F m CostmofmCapital
42 ModiglianimMillerm&mcapitalmstructure Nereus mandmJanus mLt 25 39m– m39 157m–m158
d
43 Cost mofmcapital PirinmCo 25 40m– m41 158m–m160
44 ModiglianimMillerm&mcost mof mcapital GurwinmLtd 25 41m– m42 161m–m162
45 Capitalmasset mpricingmmodelm(CAPM) RupabmCo 25 42m– m42 162m–m164
46 Cost mofmcapital SelwynmLtd 25 42m-m43 164m–m165
Weightedmaveragemcost mofmcapitalm(W
47 PolstronmLtd 25 43m-m43 166m–m168
ACC)
48 Capitalmstructure ReliablemLtd 25 44m-m44 168m–m171
49 Cost mofmcapitalmandmdividendmpolicy DDmCo 25 45m-m45 172m-m174
Section G m BusinessmValuations
50 Business mvaluations GreenwoodmLtd 25 47m– m47 175m–m177
StanzialmInc mandmBess
51 Valuationmmethod 25 48m– m49 177m–m180
erlot mLtd
OaktonmInc mandmMalla
52 Business mvaluation 25 49m-m50 180m–m182
rdmInc
53 Valuationmofmshares SomervillemLtd 25 50m-m51 183m–m184
OlivinemLtdmandmHalite
54 Business mvaluations 25 52m– m53 184m–m186
mLtd
Valuationmofmbusiness/convertiblemb Phobis mComandmDano
55 25 53m-m53 186m-m189
ond camCo
56 Valuationmofmconvertiblemdebentures Techfools.com 25 54m-m54 189m–m191
ISBNm978-1-84808-324-0
Publishedmby
Get mThroughmGuides mLtd
.m65mBedfordmStreet mSou
thmLeicestermLE1m3JRmU
nitedmKingdom
Website: mwww.GetThroughGuides.com
Email:
Onlinemcontent mfeedback mform: mhttp://gtgtraining.com/studymaterialfeedbac
k/mFormsuggestions:
Student mSupport mForum: mhttp://GetthroughGuides.co.uk/forum
Thempublishermis mgratefulmtomthemAssociationmof mCharteredm CertifiedmAccountants mformpermissionmtomreproducem
past mexaminationmquestions mandmtheirmanswers.
Limit mof mliability m/mDisclaimermofmwarranty: m Whilemthempublishermhas musedmits mbest mefforts minmpreparingmthis mboo
k,mitmmakes mnomwarranties mormrepresentations mwithmrespect mtomthemaccuracy mormcompleteness mof mcontents mof mth
is mbook mandmspecifically mdisclaims many mimpliedmwarranties mof mmerchant ability mormfitness mformany mspecific mormge
neralm purpose. mNom warranty m may m bem createdm orm extendedm by m sales m orm otherm representatives m orm writtenm
sales mmaterial. mEachm company m is m different m andm them suggestions m madem inm this m book m may m notm suit m am part
icularmpurpose. mCompanies/individuals mshouldmconsult mprofessionals mwheremappropriate. m Thempublishermshallmn
otmbemliablemformany mloss mof mprofit mormothermcommercialmdamages mincludingmbut mnot mlimitedmtomspecial, mincident
al, mconsequentialmormothermdamages.
Allmrights mreserved. mNompart mof mthis mpublicationmmay mbemreproduced, mstoredminmamretrievalmsystemmormtransmitte
d,minmany mformmormby many mmeans, melectronic, mmechanic al, mphotocopying, mscanningmormot herwise, mwithout mthemp
riorm writtenmpermissionmof mGet mThroughmGuides mLtd.
Nomres ponsibility mformany mloss mtomanyonemactingmormrefrainingmfrommactionmas mamresult mof many mmaterialminmthis mp
ublicationmcanmbemacceptedmby mthemauthor, meditormormpublisher.
Pleasemcheck mthemback mof mthis mbook mformany mupdates m/merrat a. m Furthermlivemupdat es m/ merratammay malsombemfou
ndmonlinemonmthemGet mThroughmGuides mStudent mSupport mForummat: mhttp://getthroughguides.co.uk/forum. mStude
nts maremadvisedmtomcheck mbothmof mthesemlocations.
© mGet mThroughmGuides m2012
, Aboutmthempaper i - v
Question
Topic Name Marks PagemNumbers
mnumber
Question Solution
mbank mbank
Section A m FinancialmManagementmFunction
1 10 1m-m1 59m-m59
EPSmandmShareholdermwealthmmaximi
2 JJGmCo 25 1m-m2 60m– m62
sation
3 Multiplemstakeholders 10 2m-m2 63m-m64
Section B m FinancialmManagementmEnvironment
4 Financialmmanagement menvironment Tagna 25 3m-m3 65m– m66
5 Financialmintermediary 10 4m-m4 67m-m67
6 Rolemofmfinancialmintermediaries APXmCo 25 4m-m5 68m-m70
7 Banks mandmmoney mmarkets 10 5m-m5 71m-m71
Section C m WorkingmCapitalmManagement
8 EOQmandmreceivables mmanagement AsifcomInc 25 7m-m8 73m– m75
9 FactoringmandmInvoicemdiscounting HudsonmLtd 25 8m-m8 76m– m78
Workingmcapitalmmanagement mandmfac
10 AnjomLtd 25 9m-m10 78m– m 80
toring
11 Foreignmreceivables mmanagement SprintermPlc 25 10m– m11 80m– m81
12 Discount mpolicy mformprompt mpayment Ares mLtd 25 11m– m12 82m– m83
13 Early msettlement mdiscount PNP mLtd 25 12m– m12 83m– m85
14 Early msettlement mdiscount VelmmCo 25 13m– m13 85m– m87
15 Cashmbudget mandmBaumolmmodel ThornemCo 25 14m-m14 88m– m89
16 EOQmandmFactoring FLGmCo 25 14m– m15 90m– m94
17 Overtradingmandmfactoring DoemLtd 25 15m– m16 94m– m97
EOQm&mhedgingmforeignmaccounts mpa
17 PKAmCo 25 17m–m17 97m–m100
yable
19 EOQmmodel TNGmCo 25 17m– m18 100m–m102
Section D m InvestmentmAppraisal
20 Proposedminvestment m-mNPVmandmIRR CharmmInc 25 19m– m19 103m–m105
21 Specific minvestment mdecisionm-mNPV LeamingermInc 25 20m– m20 105m–m108
22 NPVmandmIRR PVmCo 25 21m-m21 108m–m110
23 NPVmandmIRR DuomCo 25 21m-m22 111m–m113
24 Proposedminvestment m-mNPVmandmIRR ParadisemLtd 25 22m-m23 113m–m115
25 NPVmandmproject mevaluationmstages BasrilmInc 25 23m– m24 115m–m117
26 Net mpresent mvalue Painless mCo 25 24m– m24 117m–m118
Bramblingm(Electronic
27 Sensitivity manalysis 25 25m– m25 118m–m120
s mLtd)
28 Sensitivity manalysis Umunat mLtd 25 26m-m26 120m–m122
29 NPVmandmProposedmInvestment SCmCo 25 26m-m27 122m–m124
30 3Financingmcashmflows ASOP mCo 25 27m-m27 125m–m127
, Section E m
BusinessmFinance
Financemformsmallmandmmediummsized
31 Laviniamproducts mLtd 25 29m-m30 129m–m131
mentities
32 Rights missue SmithmLtd 25 30m-m30 131m–m134
Evaluationmof mamnewmfinancialmpropo
33 ArwinmLtd 25 31m-m31 134m–m138
sal
34 Sources mofmfinance McTeemPlc 25 32m-m33 138m–m141
35 Rights missuemof mshares TranscomLtd 25 33m– m33 141m–m143
36 Evaluationmof msources mof mfinance EchomCo 25 33m– m34 143m–m147
37 Sources mofmfinance TirwenmLtd 25 35m-m35 147m–m150
38 Ratiomanalysis mandmsources mofmfinanc TFRmLtd 25 36m– m36 150m–m152
e
39 Short mtermmfinance 10 36m– m36 153m–m153
40 Islamic mfinance 20 36m-m36 154m–m155
41 DividendmPolicy AnafimCo 25 37m-m37 155m–m156
Section F m CostmofmCapital
42 ModiglianimMillerm&mcapitalmstructure Nereus mandmJanus mLt 25 39m– m39 157m–m158
d
43 Cost mofmcapital PirinmCo 25 40m– m41 158m–m160
44 ModiglianimMillerm&mcost mof mcapital GurwinmLtd 25 41m– m42 161m–m162
45 Capitalmasset mpricingmmodelm(CAPM) RupabmCo 25 42m– m42 162m–m164
46 Cost mofmcapital SelwynmLtd 25 42m-m43 164m–m165
Weightedmaveragemcost mofmcapitalm(W
47 PolstronmLtd 25 43m-m43 166m–m168
ACC)
48 Capitalmstructure ReliablemLtd 25 44m-m44 168m–m171
49 Cost mofmcapitalmandmdividendmpolicy DDmCo 25 45m-m45 172m-m174
Section G m BusinessmValuations
50 Business mvaluations GreenwoodmLtd 25 47m– m47 175m–m177
StanzialmInc mandmBess
51 Valuationmmethod 25 48m– m49 177m–m180
erlot mLtd
OaktonmInc mandmMalla
52 Business mvaluation 25 49m-m50 180m–m182
rdmInc
53 Valuationmofmshares SomervillemLtd 25 50m-m51 183m–m184
OlivinemLtdmandmHalite
54 Business mvaluations 25 52m– m53 184m–m186
mLtd
Valuationmofmbusiness/convertiblemb Phobis mComandmDano
55 25 53m-m53 186m-m189
ond camCo
56 Valuationmofmconvertiblemdebentures Techfools.com 25 54m-m54 189m–m191
