,Editionv4,vVersionv1
ISBNv978-1-84808-324-0
Publishedvby
GetvThroughvGuidesvLtd
.v65vBedfordvStreetvSout
hvLeicestervLE1v3JRvUn
itedvKingdom
Website:vwww.GetThroughGuides.com
Email:
Onlinevcontentvfeedbackvform:vhttp://gtgtraining.com/studymaterialfeedback
/vForvsuggestions:
StudentvSupportvForum:vhttp://GetthroughGuides.co.uk/forum
ThevpublishervisvgratefulvtovthevAssociationvofvCharteredvCertifiedvAccountantsvforvpermissionvtovreproducevpa
stvexaminationvquestionsvandvtheirvanswers.
Limitvofvliabilityv/vDisclaimervofvwarranty:v Whilevthevpublishervhasvusedvitsvbestveffortsvinvpreparingvthisvbook,vi
tvmakesvnovwarrantiesvorvrepresentationsvwithvrespectvtovthevaccuracyvorvcompletenessvofvcontentsvofvthisvbo
okvandvspecificallyvdisclaimsvanyvimpliedvwarrantiesvofvmerchantabilityvorvfitnessvforvanyvspecificvorvgeneralv p
urpose.vNov warrantyv mayv bev createdv orv extendedv byv salesv orv otherv representativesv orv writtenv salesvmat
erial.vEachv companyv isv differentv andv thev suggestionsv madev inv thisv bookv mayv notv suitv av particularvpurpo
se.vCompanies/individualsvshouldvconsultvprofessionalsvwherevappropriate.v Thevpublishervshallvnotvbevliablevf
orvanyvlossvofvprofitvorvothervcommercialvdamagesvincludingvbutvnotvlimitedvtovspecial,vincidental,vconsequenti
alvorvothervdamages.
Allvrightsvreserved.vNovpartvofvthisvpublicationvmayvbevreproduced,vstoredvinvavretrievalvsystemvorvtransmitted,v
invanyvformvorvbyvanyvmeans,velectronic,vmechanical,vphotocopying,vscanningvorvotherwise,vwithoutvthevpriorv
writtenvpermissionvofvGetvThroughvGuidesvLtd.
Novresponsibilityvforvanyvlossvtovanyonevactingvorvrefrainingvfromvactionvasvavresultvofvanyvmaterialvinvthisvpubl
icationvcanvbevacceptedvbyvthevauthor,veditorvorvpublisher.
Pleasevcheckvthevbackvofvthisvbookvforvanyvupdatesv/verrata.v Furthervlivevupdatesv/verratavmayvalsovbevfoundv
onlinevonvthevGetvThroughvGuidesvStudentvSupportvForumvat:vhttp://getthroughguides.co.uk/forum.vStudentsva
revadvisedvtovcheckvbothvofvthesevlocations.
©vGetvThroughvGuidesv2012
, Aboutvthevpaper i - v
Question
Topic Name Marks PagevNumbers
vnumber
Question Solution
vbank vbank
Section A v FinancialvManagementvFunction
1 10 1v-v1 59v-v59
EPSvandvShareholdervwealthvmaximis
2 JJGvCo 25 1v-v2 60v–v62
ation
3 Multiplevstakeholders 10 2v-v2 63v-v64
Section B v FinancialvManagementvEnvironment
4 Financialvmanagementvenvironment Tagna 25 3v-v3 65v–v66
5 Financialvintermediary 10 4v-v4 67v-v67
6 Rolevofvfinancialvintermediaries APXvCo 25 4v-v5 68v-v70
7 Banksvandvmoneyvmarkets 10 5v-v5 71v-v71
Section C v WorkingvCapitalvManagement
8 EOQvandvreceivablesvmanagement AsifcovInc 25 7v-v8 73v–v75
9 FactoringvandvInvoicevdiscounting HudsonvLtd 25 8v-v8 76v–v78
Workingvcapitalvmanagementvandvfact
10 AnjovLtd 25 9v-v10 78v–v 80
oring
11 Foreignvreceivablesvmanagement SprintervPlc 25 10v–v11 80v–v81
12 Discountvpolicyvforvpromptvpayment AresvLtd 25 11v–v12 82v–v83
13 Earlyvsettlementvdiscount PNPvLtd 25 12v–v12 83v–v85
14 Earlyvsettlementvdiscount VelmvCo 25 13v–v13 85v–v87
15 CashvbudgetvandvBaumolvmodel ThornevCo 25 14v-v14 88v–v89
16 EOQvandvFactoring FLGvCo 25 14v–v15 90v–v94
17 Overtradingvandvfactoring DoevLtd 25 15v–v16 94v–v97
EOQv&vhedgingvforeignvaccountsvpay
17 PKAvCo 25 17v–v17 97v–v100
able
19 EOQvmodel TNGvCo 25 17v–v18 100v–v102
Section D v InvestmentvAppraisal
20 Proposedvinvestmentv-vNPVvandvIRR CharmvInc 25 19v–v19 103v–v105
21 Specificvinvestmentvdecisionv-vNPV LeamingervInc 25 20v–v20 105v–v108
22 NPVvandvIRR PVvCo 25 21v-v21 108v–v110
23 NPVvandvIRR DuovCo 25 21v-v22 111v–v113
24 Proposedvinvestmentv-vNPVvandvIRR ParadisevLtd 25 22v-v23 113v–v115
25 NPVvandvprojectvevaluationvstages BasrilvInc 25 23v–v24 115v–v117
26 Netvpresentvvalue PainlessvCo 25 24v–v24 117v–v118
Bramblingv(Electronics
27 Sensitivityvanalysis 25 25v–v25 118v–v120
vLtd)
28 Sensitivityvanalysis UmunatvLtd 25 26v-v26 120v–v122
29 NPVvandvProposedvInvestment SCvCo 25 26v-v27 122v–v124
30 3Financingvcashvflows ASOPvCo 25 27v-v27 125v–v127
, Section E v BusinessvFinance
Financevforvsmallvandvmediumvsizedv
31 LaviniavproductsvLtd 25 29v-v30 129v–v131
entities
32 Rightsvissue SmithvLtd 25 30v-v30 131v–v134
Evaluationvofvavnewvfinancialvpropo
33 ArwinvLtd 25 31v-v31 134v–v138
sal
34 Sourcesvofvfinance McTeevPlc 25 32v-v33 138v–v141
35 Rightsvissuevofvshares TranscovLtd 25 33v–v33 141v–v143
36 Evaluationvofvsourcesvofvfinance EchovCo 25 33v–v34 143v–v147
37 Sourcesvofvfinance TirwenvLtd 25 35v-v35 147v–v150
38 Ratiovanalysisvandvsourcesvofvfinanc TFRvLtd 25 36v–v36 150v–v152
e
39 Shortvtermvfinance 10 36v–v36 153v–v153
40 Islamicvfinance 20 36v-v36 154v–v155
41 DividendvPolicy AnafivCo 25 37v-v37 155v–v156
Section F v CostvofvCapital
42 ModiglianivMillerv&vcapitalvstructure NereusvandvJanusvLtd 25 39v–v39 157v–v158
43 Costvofvcapital PirinvCo 25 40v–v41 158v–v160
44 ModiglianivMillerv&vcostvofvcapital GurwinvLtd 25 41v–v42 161v–v162
45 Capitalvassetvpricingvmodelv(CAPM) RupabvCo 25 42v–v42 162v–v164
46 Costvofvcapital SelwynvLtd 25 42v-v43 164v–v165
Weightedvaveragevcostvofvcapitalv(W
47 PolstronvLtd 25 43v-v43 166v–v168
ACC)
48 Capitalvstructure ReliablevLtd 25 44v-v44 168v–v171
49 Costvofvcapitalvandvdividendvpolicy DDvCo 25 45v-v45 172v-v174
Section G v BusinessvValuations
50 Businessvvaluations GreenwoodvLtd 25 47v–v47 175v–v177
StanzialvIncvandvBess
51 Valuationvmethod 25 48v–v49 177v–v180
erlotvLtd
OaktonvIncvandvMalla
52 Businessvvaluation 25 49v-v50 180v–v182
rdvInc
53 Valuationvofvshares SomervillevLtd 25 50v-v51 183v–v184
OlivinevLtdvandvHalitev
54 Businessvvaluations 25 52v–v53 184v–v186
Ltd
Valuationvofvbusiness/convertiblevbo PhobisvCovandvDano
55 25 53v-v53 186v-v189
nd cavCo
56 Valuationvofvconvertiblevdebentures Techfools.com 25 54v-v54 189v–v191
ISBNv978-1-84808-324-0
Publishedvby
GetvThroughvGuidesvLtd
.v65vBedfordvStreetvSout
hvLeicestervLE1v3JRvUn
itedvKingdom
Website:vwww.GetThroughGuides.com
Email:
Onlinevcontentvfeedbackvform:vhttp://gtgtraining.com/studymaterialfeedback
/vForvsuggestions:
StudentvSupportvForum:vhttp://GetthroughGuides.co.uk/forum
ThevpublishervisvgratefulvtovthevAssociationvofvCharteredvCertifiedvAccountantsvforvpermissionvtovreproducevpa
stvexaminationvquestionsvandvtheirvanswers.
Limitvofvliabilityv/vDisclaimervofvwarranty:v Whilevthevpublishervhasvusedvitsvbestveffortsvinvpreparingvthisvbook,vi
tvmakesvnovwarrantiesvorvrepresentationsvwithvrespectvtovthevaccuracyvorvcompletenessvofvcontentsvofvthisvbo
okvandvspecificallyvdisclaimsvanyvimpliedvwarrantiesvofvmerchantabilityvorvfitnessvforvanyvspecificvorvgeneralv p
urpose.vNov warrantyv mayv bev createdv orv extendedv byv salesv orv otherv representativesv orv writtenv salesvmat
erial.vEachv companyv isv differentv andv thev suggestionsv madev inv thisv bookv mayv notv suitv av particularvpurpo
se.vCompanies/individualsvshouldvconsultvprofessionalsvwherevappropriate.v Thevpublishervshallvnotvbevliablevf
orvanyvlossvofvprofitvorvothervcommercialvdamagesvincludingvbutvnotvlimitedvtovspecial,vincidental,vconsequenti
alvorvothervdamages.
Allvrightsvreserved.vNovpartvofvthisvpublicationvmayvbevreproduced,vstoredvinvavretrievalvsystemvorvtransmitted,v
invanyvformvorvbyvanyvmeans,velectronic,vmechanical,vphotocopying,vscanningvorvotherwise,vwithoutvthevpriorv
writtenvpermissionvofvGetvThroughvGuidesvLtd.
Novresponsibilityvforvanyvlossvtovanyonevactingvorvrefrainingvfromvactionvasvavresultvofvanyvmaterialvinvthisvpubl
icationvcanvbevacceptedvbyvthevauthor,veditorvorvpublisher.
Pleasevcheckvthevbackvofvthisvbookvforvanyvupdatesv/verrata.v Furthervlivevupdatesv/verratavmayvalsovbevfoundv
onlinevonvthevGetvThroughvGuidesvStudentvSupportvForumvat:vhttp://getthroughguides.co.uk/forum.vStudentsva
revadvisedvtovcheckvbothvofvthesevlocations.
©vGetvThroughvGuidesv2012
, Aboutvthevpaper i - v
Question
Topic Name Marks PagevNumbers
vnumber
Question Solution
vbank vbank
Section A v FinancialvManagementvFunction
1 10 1v-v1 59v-v59
EPSvandvShareholdervwealthvmaximis
2 JJGvCo 25 1v-v2 60v–v62
ation
3 Multiplevstakeholders 10 2v-v2 63v-v64
Section B v FinancialvManagementvEnvironment
4 Financialvmanagementvenvironment Tagna 25 3v-v3 65v–v66
5 Financialvintermediary 10 4v-v4 67v-v67
6 Rolevofvfinancialvintermediaries APXvCo 25 4v-v5 68v-v70
7 Banksvandvmoneyvmarkets 10 5v-v5 71v-v71
Section C v WorkingvCapitalvManagement
8 EOQvandvreceivablesvmanagement AsifcovInc 25 7v-v8 73v–v75
9 FactoringvandvInvoicevdiscounting HudsonvLtd 25 8v-v8 76v–v78
Workingvcapitalvmanagementvandvfact
10 AnjovLtd 25 9v-v10 78v–v 80
oring
11 Foreignvreceivablesvmanagement SprintervPlc 25 10v–v11 80v–v81
12 Discountvpolicyvforvpromptvpayment AresvLtd 25 11v–v12 82v–v83
13 Earlyvsettlementvdiscount PNPvLtd 25 12v–v12 83v–v85
14 Earlyvsettlementvdiscount VelmvCo 25 13v–v13 85v–v87
15 CashvbudgetvandvBaumolvmodel ThornevCo 25 14v-v14 88v–v89
16 EOQvandvFactoring FLGvCo 25 14v–v15 90v–v94
17 Overtradingvandvfactoring DoevLtd 25 15v–v16 94v–v97
EOQv&vhedgingvforeignvaccountsvpay
17 PKAvCo 25 17v–v17 97v–v100
able
19 EOQvmodel TNGvCo 25 17v–v18 100v–v102
Section D v InvestmentvAppraisal
20 Proposedvinvestmentv-vNPVvandvIRR CharmvInc 25 19v–v19 103v–v105
21 Specificvinvestmentvdecisionv-vNPV LeamingervInc 25 20v–v20 105v–v108
22 NPVvandvIRR PVvCo 25 21v-v21 108v–v110
23 NPVvandvIRR DuovCo 25 21v-v22 111v–v113
24 Proposedvinvestmentv-vNPVvandvIRR ParadisevLtd 25 22v-v23 113v–v115
25 NPVvandvprojectvevaluationvstages BasrilvInc 25 23v–v24 115v–v117
26 Netvpresentvvalue PainlessvCo 25 24v–v24 117v–v118
Bramblingv(Electronics
27 Sensitivityvanalysis 25 25v–v25 118v–v120
vLtd)
28 Sensitivityvanalysis UmunatvLtd 25 26v-v26 120v–v122
29 NPVvandvProposedvInvestment SCvCo 25 26v-v27 122v–v124
30 3Financingvcashvflows ASOPvCo 25 27v-v27 125v–v127
, Section E v BusinessvFinance
Financevforvsmallvandvmediumvsizedv
31 LaviniavproductsvLtd 25 29v-v30 129v–v131
entities
32 Rightsvissue SmithvLtd 25 30v-v30 131v–v134
Evaluationvofvavnewvfinancialvpropo
33 ArwinvLtd 25 31v-v31 134v–v138
sal
34 Sourcesvofvfinance McTeevPlc 25 32v-v33 138v–v141
35 Rightsvissuevofvshares TranscovLtd 25 33v–v33 141v–v143
36 Evaluationvofvsourcesvofvfinance EchovCo 25 33v–v34 143v–v147
37 Sourcesvofvfinance TirwenvLtd 25 35v-v35 147v–v150
38 Ratiovanalysisvandvsourcesvofvfinanc TFRvLtd 25 36v–v36 150v–v152
e
39 Shortvtermvfinance 10 36v–v36 153v–v153
40 Islamicvfinance 20 36v-v36 154v–v155
41 DividendvPolicy AnafivCo 25 37v-v37 155v–v156
Section F v CostvofvCapital
42 ModiglianivMillerv&vcapitalvstructure NereusvandvJanusvLtd 25 39v–v39 157v–v158
43 Costvofvcapital PirinvCo 25 40v–v41 158v–v160
44 ModiglianivMillerv&vcostvofvcapital GurwinvLtd 25 41v–v42 161v–v162
45 Capitalvassetvpricingvmodelv(CAPM) RupabvCo 25 42v–v42 162v–v164
46 Costvofvcapital SelwynvLtd 25 42v-v43 164v–v165
Weightedvaveragevcostvofvcapitalv(W
47 PolstronvLtd 25 43v-v43 166v–v168
ACC)
48 Capitalvstructure ReliablevLtd 25 44v-v44 168v–v171
49 Costvofvcapitalvandvdividendvpolicy DDvCo 25 45v-v45 172v-v174
Section G v BusinessvValuations
50 Businessvvaluations GreenwoodvLtd 25 47v–v47 175v–v177
StanzialvIncvandvBess
51 Valuationvmethod 25 48v–v49 177v–v180
erlotvLtd
OaktonvIncvandvMalla
52 Businessvvaluation 25 49v-v50 180v–v182
rdvInc
53 Valuationvofvshares SomervillevLtd 25 50v-v51 183v–v184
OlivinevLtdvandvHalitev
54 Businessvvaluations 25 52v–v53 184v–v186
Ltd
Valuationvofvbusiness/convertiblevbo PhobisvCovandvDano
55 25 53v-v53 186v-v189
nd cavCo
56 Valuationvofvconvertiblevdebentures Techfools.com 25 54v-v54 189v–v191
