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Anyone sitting BS2 Exams?
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Hey, hope Industrial relations went well for everybody. Sooo happy to have them two exams out of the way, its such a weight off! Anyway need to get down to business with this Financial management, so damn tough with this weather
Just wondering what exact theory stuff do we need to know coz apparently one of the long question will be theory so could be a great way to pick up marks. Should we just know pretty much all the theory that is on the slides? 0 -
hey, yeah just five more days and its summer
hopefully the sun will stay!!!
I would learn all the theory, i don't think there's really that much and once you give it a read over ya pretty much know it. I'd especially do WACC theory and Capital Market efficiency is practicaly guarenteed considering he emailed us about it after we finished! Don't think we covered preference shares and a few other things in section 3- I'm not sure exactly what, do you know? Anyone know if this years grades count for our final degree??0 -
Butters111 wrote: »hey, yeah just five more days and its summer hopefully the sun will stay!!!
I would learn all the theory, i don't think there's really that much and once you give it a read over ya pretty much know it. I'd especially do WACC theory and Capital Market efficiency is practicaly guarenteed considering he emailed us about it after we finished! Don't think we covered preference shares and a few other things in section 3- I'm not sure exactly what, do you know? Anyone know if this years grades count for our final degree??
Yeah learning this theory is really nothing compared to the content of stuff we have had to learn off for out last 2 exams so i'll be doing it all. Capital market efficiency is certainly gonna be on it as you said and will probably appear as a short question. The longer theory could be more IRR, NPV, Payback, WACC etc. I'm really hoping one of section B will be about calculating one of the above as well but I never learned how to do that 'cash flows' question where you have to leave out certain costs like sunk costs etc.
It just confuses me and I reckon one question in sec.B should be one stuff like NPV/Payback/IRR of projects so I should be able to answer this much better than cash flows. As for section C then, there should be one question on theory. I need like 33%/100 to pass so I'm hoping I should be ok. Still confused over a couple of the short questions but will work on these over the next few days. Apparently the project appraisal question that we did for quiz 2 are not gonna be asked so we don't have to know these.0 -
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Butters111 wrote: »hey, yeah just five more days and its summer hopefully the sun will stay!!!
I would learn all the theory, i don't think there's really that much and once you give it a read over ya pretty much know it. I'd especially do WACC theory and Capital Market efficiency is practicaly guarenteed considering he emailed us about it after we finished! Don't think we covered preference shares and a few other things in section 3- I'm not sure exactly what, do you know? Anyone know if this years grades count for our final degree??
No, only your results in final year count towards your degree. Your results in first and second year are only really important when it comes to applying for graduate programmes when you're in final year and when looking for summer internships.0 -
Butters111 wrote: »Ok cool. Yeah I'm a bit sketchy on the cash flow q and I went to that class!! I don't think it's even mentioned in the notes! Today I'm working on Market Research and Organistions, wanna have something done! you covering all of each or any tips?
For marketing research, just read the slides and do the topics that came up on the sample paper. Stuff like Questionnaire design (10 steps), comparative & non-comparative scaling techniques (be able to identify the type of measurement used in a sample questionnaire that he may put on the paper) and Survey methods are the topics which I have highlighted in my notes as being the most commonly asked stuff. For this exam I need to get 16%/100 minimum so just reading slides on the topics should do it and being able to list things, and write briefly about them. If I manage to fail this one I really shouldn't be in college
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ThanksFor marketing research, just read the slides and do the topics that came up on the sample paper. Stuff like Questionnaire design (10 steps), comparative & non-comparative scaling techniques (be able to identify the type of measurement used in a sample questionnaire that he may put on the paper) and Survey methods are the topics which I have highlighted in my notes as being the most commonly asked stuff. For this exam I need to get 16%/100 minimum so just reading slides on the topics should do it and being able to list things, and write briefly about them. If I manage to fail this one I really shouldn't be in college Ha yeah I need somethin round that too. It's just that tutor Joanne talked as if it was really difficult and that loads a ppl didn't make up the 10% or whatever little amount they needed! and I know they probably didnt even glance at the notes but still... it freaks me out a lil bit! 0 -
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Butters111 wrote: »Thanks Ha yeah I need somethin round that too. It's just that tutor Joanne talked as if it was really difficult and that loads a ppl didn't make up the 10% or whatever little amount they needed! and I know they probably didnt even glance at the notes but still... it freaks me out a lil bit!
Yeah this really bugs me coz I emailed the lecturer Darach about two weeks ago asking about this and here is the response I got. I only got this reply the day b4 the exams started so forgot to mention it here.
"I didn't teach this course last year so I'm completely unaware of what may have happened. I'm also a bit puzzled regarding what was supposed to have been said in the tutorials as neither of the tutors were here last year either. I think you're asking me if it's possible to pass the exam without reading the text. The best answer is maybe, I suppose. There really should be no problem about this as most of the slides are based directly on the text with the exception of the readings on focus groups and interviews. Yes, last year's paper and the Christmas paper are good indications of the style of questions that appear for this subject.
Best of luck"
He is obviously referring to what is required to pass the the paper, i.e, 40% or over, I didn't exactly want to ask him what do I need to do to get 16% as I didn't think he's be too receptive. Anyway I dunno what the hell that tutor one was on about but if I had to guess I'd say she was just a gob****e!:D0 -
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All you've done there is calculated the Present Value of €30,000 in 20 years, discounted at 7%.
He receives €30,000 per annum for 20 years which makes it an annuity.
20 year annuity factor @7% cost of capital (from tables) = 10.59401
NPV = -200,000 + 30,000(10.59401) = €117,820.30
Cheers, appreciate it. 0 -
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This question was posted on the facebook page and this is his response as to how to find the IRR,
"guess one rate, find NPV, guess another, find NPV and apply these values to the formula.
In this case, NPV = -30 + 75 (Annuity Factor) = 0
So find annuity factor which = 2.5 over 4 years..."
As usual I am lost, where is 2.5 coming from?
Cheers, must have missed it today, been searching for the right way for aaages!! i'll have a go now
EDIT** just lookin at it 2.5 multiplyed by 30 gives you 75 so i assume it comes from dividing across in some way, guess though0 -
hobbit of the shire wrote: »Cheers, must have missed it today, been searching for the right way for aaages!! i'll have a go now
EDIT** just lookin at it 2.5 multiplyed by 30 gives you 75 so i assume it comes from dividing across in some way, guess though
If you figure it out do you mind posting some feedback on how to do it, any help would be much appreciated 0 -
Ok now i'm freaking out about marketing research, I've been trying to study it over the past 3 hours and I just cannot understand anything. There is way too much detail in the slides and so many illustrations and examples. Like its so hard to just write sample answers coz its all points. Its like a different language this crap, I hope the tutor wasn't actually right when she said the exam is hard! 0
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This question was posted on the facebook page and this is his response as to how to find the IRR,
"guess one rate, find NPV, guess another, find NPV and apply these values to the formula.
In this case, NPV = -30 + 75 (Annuity Factor) = 0
So find annuity factor which = 2.5 over 4 years..."
As usual I am lost, where is 2.5 coming from?
why when calculating the NPV is it multiplied by an annuity factor? Should it not be multiplied by the PV factor like the equation: 'NPV= Co+C1_yr_PV_factor)+...' ??? I'm really confused!! And should the first cash flow not be -75 because that's the first cash flow, the initial investment? and then : -75 + 30(PV factor)+ 30(PVfactor)+ 30(PV factor )+ 30 (PV Factor) Please help!0 -
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cartman555 wrote: »does anyone know how to do q12 b on the 2008 repeat paper:
Cost of capital 15%, project investment 75000. Project will produce net cash savings of 30000 per annum for 4 years. Ignoring tax find the NPV and the IRR.
I know how to calculate the NPV but im completely lost for IRR. The formula he gives is:
IRR= A+[NPV(of A)/(NVPa-NVPb)]*(B-A)
Any help much appreciated, I've been at it all day!This question was posted on the facebook page and this is his response as to how to find the IRR,
"guess one rate, find NPV, guess another, find NPV and apply these values to the formula.
In this case, NPV = -30 + 75 (Annuity Factor) = 0
So find annuity factor which = 2.5 over 4 years..."
As usual I am lost, where is 2.5 coming from?
The bolded bit is wrong. The initial investment is €75,000 and the annual saving are €30,000, so it should read:
Step 1
NPV = -75 + 30(Annuity Factor) = 0
Rearranged to find the annuity factor,
Annuity Factor = 75/30 = 2.5
Step 2
You know the annuity factor is 2.5 and the length of the annuity is 4 years, so by looking at the PV of an Annuity tables, you can see that the cost of capital at which NPV=O (ie. the IRR) is somewhere between 21-22%.
Step 3
Calculate the NPV of the project using a cost of capital of 21% (NPV = €1,200) and then again using 22% (NPV = -€180)
Step 4
Insert these into the IRR formula. I've no idea what formula is used in your notes but they're all variations of the same one. The one I use is:
IRR = Rate1 + NPV1(Rate2-Rate1)/NPV1 - NPV2
IRR = 21% + 1,200(22%-21%)/1,200+180 = 21.87% 0 -
Ok now i'm freaking out about marketing research, I've been trying to study it over the past 3 hours and I just cannot understand anything. There is way too much detail in the slides and so many illustrations and examples. Like its so hard to just write sample answers coz its all points. Its like a different language this crap, I hope the tutor wasn't actually right when she said the exam is hard!
Maybe forget doing sample answers and just read through the slides. probably be easier when you've an understanding of everything in general. I think the q's might be prashed a bit awkwardly but they actually are askin for simple systematic answers!0 -
The bolded bit is wrong. The initial investment is €75,000 and the annual saving are €30,000, so it should read:
Step 1
NPV = -75 + 30(Annuity Factor) = 0
Rearranged to find the annuity factor,
Annuity Factor = 75/30 = 2.5
Step 2
You know the annuity factor is 2.5 and the length of the annuity is 4 years, so by looking at the PV of an Annuity tables, you can see that the cost of capital at which NPV=O (ie. the IRR) is somewhere between 21-22%.
Step 3
Calculate the NPV of the project using a cost of capital of 21% (NPV = €1,200) and then again using 22% (NPV = -€180)
Step 4
Insert these into the IRR formula. I've no idea what formula is used in your notes but they're all variations of the same one. The one I use is:
IRR = Rate1 + NPV1(Rate2-Rate1)/NPV1 - NPV2 IRR = 21% + 1,200(22%-21%)/1,200+180 = 21.87%
Hey, where does the '15 % cost of capital' come in to it?0 -
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Butters111 wrote: »
why when calculating the NPV is it multiplied by an annuity factor? Should it not be multiplied by the PV factor like the equation: 'NPV= Co+C1_yr_PV_factor)+...' ??? I'm really confused!! And should the first cash flow not be -75 because that's the first cash flow, the initial investment? and then : -75 + 30(PV factor)+ 30(PVfactor)+ 30(PV factor )+ 30 (PV Factor) Please help!
You're right on both counts!:)
The reason you use the annuity factor is just to make it easier and quicker for yourself. You can discount the individual cash flows if you want and you'll still get the same answer. It's grand if the project only lasts 4 or 5 years but would be fairly time consuming if you were discounting cash flows for 20 years.
If the annual cash flows are the same and for a specified time period, use the annuity factor.
If the cash flows are the same and expected to continue forever, divide the cash flow by the cost of capital to calculate the PV of the perpetuity.0 -
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Butters111 wrote: »Thanks a million!
No problem! If you've any more questions on FM, just fire away.:)
What day is your Financial Management exam on?0 -
The bolded bit is wrong. The initial investment is €75,000 and the annual saving are €30,000, so it should read:
Step 1
NPV = -75 + 30(Annuity Factor) = 0
Rearranged to find the annuity factor,
Annuity Factor = 75/30 = 2.5
Step 2
You know the annuity factor is 2.5 and the length of the annuity is 4 years, so by looking at the PV of an Annuity tables, you can see that the cost of capital at which NPV=O (ie. the IRR) is somewhere between 21-22%.
Step 3
Calculate the NPV of the project using a cost of capital of 21% (NPV = €1,200) and then again using 22% (NPV = -€180)
Step 4
Insert these into the IRR formula. I've no idea what formula is used in your notes but they're all variations of the same one. The one I use is:
IRR = Rate1 + NPV1(Rate2-Rate1)/NPV1 - NPV2 IRR = 21% + 1,200(22%-21%)/1,200+180 = 21.87%
Thanks a million spent HOURS on it!!!0 -
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The bolded bit is wrong. The initial investment is €75,000 and the annual saving are €30,000, so it should read:
Step 1
NPV = -75 + 30(Annuity Factor) = 0
Rearranged to find the annuity factor,
Annuity Factor = 75/30 = 2.5
Step 2
You know the annuity factor is 2.5 and the length of the annuity is 4 years, so by looking at the PV of an Annuity tables, you can see that the cost of capital at which NPV=O (ie. the IRR) is somewhere between 21-22%.
Step 3
Calculate the NPV of the project using a cost of capital of 21% (NPV = €1,200) and then again using 22% (NPV = -€180)
Step 4
Insert these into the IRR formula. I've no idea what formula is used in your notes but they're all variations of the same one. The one I use is:
IRR = Rate1 + NPV1(Rate2-Rate1)/NPV1 - NPV2 IRR = 21% + 1,200(22%-21%)/1,200+180 = 21.87%
This man deserves a medal, after many hours spent chasing my tail someone finally explained it in a way even a simpleton like me could understand... thankyou!! 0 -
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