2014年国际注册会计师ACCA试卷
The Association of Chartered Certified Accountants
Paper F9
ALL FOUR questions are compulsory and MUST be attempted 1 The Board of OAP Co has decided to limit investment funds to $10 million for the next year and is preparing its capital budget. The company is considering five projects, as follows: Project Project Project Project Project A B C D E Initial investment $2,500,000 $2,200,000 $2,600,000 $1,900,000 $5,000,000 Net present value $1,000,000 $1,550,000 $1,350,000 $1,500,000 se forecasts are before taking account of selling price inflation of 5·0% per year, variable cost inflation of 6·0% per year and fixed cost inflation of 3·5% per year. The fixed costs are incremental fixed costs which are associated with Project E. At the end of four years, machinery from the project will be sold for scrap with a value of $400,000. Tax allowable depreciation on the initial investment cost of Project E is available on a 25% reducing balance basis and OAP Co pays corporation tax of 28% per year, one year in arrears. A balancing charge or allowance is available at the end of the fourth year of operation. OAP Co has a nominal after-tax cost of capital of 13% per year. Required: (a) Calculate the nominal after-tax net present value of Project E and comment on the financial acceptability of this project. (14 marks) (b) Calculate the maximum net present value which can be obtained from investing the fund of $10 million, assuming here that the nominal after-tax NPV of Project E is zero. (5 marks) (c) Discuss the reasons why the Board of OAP Co may have decided to limit investment funds for the next year. (6 marks) (25 marks)
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[P.T.O.
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The equity beta of Fence Co is 0·9 and the company has issued 10 million ordinary shares. The market value of each ordinary share is $7·50. The company is also financed by 7% bonds with a nominal value of $100 per bond, which will be redeemed in seven years’ time at nominal value. The bonds have a total nominal value of $14 million. Interest on the bonds has just been paid and the current market value of each bond is $107·14. Fence Co plans to invest in a project which is different to its existing business operations and has identified a company in the same business area as the project, Hex Co. The equity beta of Hex Co is 1·2 and the company has an equity market value of $54 million. The market value of the debt of Hex Co is $12 million. The risk-free rate of return is 4% per year and the average return on the stock market is 11% per year. Both companies pay corporation tax at a rate of 20% per year. Required: (a) Calculate the current weighted average cost of capital of Fence Co. (b) Calculate a cost of equity which could be used in appraising the new project. (7 marks) (4 marks)
All five projects have a project life of four years. Projects A, B, C and D are divisible, and Projects B and D are mutually exclusive. All net present values are in nominal, after-tax terms. Project E This is a strategically important project which the Board of OAP Co have decided must be undertaken in order for the company to remain competitive, regardless of its financial acceptability. Information relating to the future cash flows of this project is as follows: Year Sales volume (units) Selling price ($/unit) Variable cost ($/unit) Fixed costs ($000) 1 12,000 450 260 750 2 13,000 475 280 750 3 10,000 500 295 750 4 10,000 570 320 750
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The current assets and current liabilities of CSZ Co at the end of March 2014 are as follows: Inventory Trade receivables Trade payables Overdraft Net current assets $000 5,700 6,575 –––––– 2,137 4,682 –––––– $000 12,275 6,819 ––––––– 5,456 –––––––
Fundamentals Level – Skills Module
Financial Management
Friday 6 June 2014
Time allowed Reading and planning: Writing:
15 minutes 3 hours
ALL FOUR questions are compulsory and MUST be attempted. Formulae Sheet, Present Value and Annuity Tables are on pages 6, 7 and 8. Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall.
For the year to end of March 2014, CSZ Co had domestic and foreign sales of $40 million, all on credit, while cost of sales was $26 million. Trade payables related to both domestic and foreign suppliers. For the year to end of March 2015, CSZ Co has forecast that credit sales will remain at $40 million while cost of sales will fall to 60% of sales. The company expects current assets to consist of inventory and trade receivables, and current liabilities to consist of trade payables and the company’s overdraft. CSZ Co also plans to achieve the following target working capital ratio values for the year to the end of March 2015: Inventory days: Trade receivables days: Trade payables days: Current ratio: Required: (a) Calculate the working capital cycle (cash collection cycle) of CSZ Co at the end of March 2014 and discuss whether a working capital cycle should be positive or negative. (6 marks) (b) Calculate the target quick ratio (acid test ratio) and the target ratio of sales to net working capital of CSZ Co at the end of March 2015. (5 marks) (c) Analyse and compare the current asset and current liability positions for March 2014 and March 2015, and discuss how the working capital financing policy of CSZ Co would have changed. (8 marks) (d) Briefly discuss THREE internal methods which could be used by CSZ Co to manage foreign currency transaction risk arising from its continuing business activities. (6 marks) (25 marks) 60 days 75 days 55 days 1·4 times
【国际注册会计师ACCA】F7 2008-2014历年真题-f7int_2011_dec_a
Fundamentals Level – Skills Module, Paper F7 (INT)Financial Reporting (International)December 2011 Answers 1Consolidated statement of financial position of Paladin as at 30 September 2011$’000$’000 AssetsNon-current assets:Property, plant and equipment (40,000 + 31,000 + 4,000 –1,000)74,000Intangible assets (w (i))–goodwill15,000–other intangibles (7,500 + 3,000 –500)10,000Investment in associate (w (ii))7,700––––––––106,700 Current assetsInventory (11,200 + 8,400 –600 URP (w (iii)))19,000T rade receivables (7,400 + 5,300 –1,300 intra-group (w (iii)))11,400Bank3,40033,800–––––––––––––––T otal assets140,500––––––––Equity and liabilitiesEquity attributable to owners of the parentEquity shares of $1 each 50,000Retained earnings (w (iv))35,200––––––––85,200 Non-controlling interest (w (vi))7,900––––––––T otal equity93,100Non-current liabilitiesDeferred tax (15,000 + 8,000)23,000Current liabilitiesBank overdraft2,500Deferred consideration 5,400T rade payables (11,600 + 6,200 –1,300 intra-group (w (iii))) 16,50024,400–––––––––––––––T otal equity and liabilities140,500––––––––Workings (figures in brackets are in $’000)(i)Goodwill in Saracen$’000$’000 Controlling interest (see below)Immediate cash32,000Deferred consideration (5,400 x 100/108)5,000Non-controlling interest (10,000 x 20% (see below) x $3·50)7,000–––––––44,000 Equity shares10,000Pre-acquisition reserves:At 1 October 2010 12,000Fair value adjustments– plant4,000–intangible3,000(29,000)––––––––––––––Goodwill arising on acquisition15,000–––––––The cost of the majority shareholding in Saracen was $32 million. Paladin acquired eight million shares and Saracen has10 million $1 shares, this gives a controlling interest of 80% and a non-controlling interest of 20%.The customer relationship asset is recognised as an intangible asset in the consolidated financial statements under IFRS 3 Business combinations.(ii)Carrying amount of Augusta at 30 September 2011$’000 Cash consideration10,000Share of post-acquisition profits (1,200 x 8/12 x 25%)200Impairment loss (2,500)––––––7,700––––––(iii)Unrealised profit (URP) in inventory/intra-group current accountsThe URP in Saracen’s inventory (supplied by Paladin) of $2·6 million is $600,000 (2,600 x 30/130). The current account balances of Paladin and Saracen should be eliminated from trade receivables and payables at the agreed amount of $1·3 million.(iv)Consolidated retained earnings:$’000 Paladin’s retained earnings (25,700 + 9,200)34,900Saracen’s post-acquisition profits (4,500 (w (v)) x 80%) 3,600Augusta’s post-acquisition profits (w (ii))200Augusta’s impairment loss(2,500)URP in inventory (w (iii))(600)Finance cost of deferred consideration (5,000 x 8%)(400)–––––––35,200–––––––(v)Post-acquisition adjusted profit of Saracen is:$’000 Profit as reported6,000Additional depreciation of plant (4,000/4 years)(1,000)Additional amortisation of customer relationship asset (3,000/6 years)(500)––––––4,500––––––(vi)Non-controlling interest$’000 Fair value on acquisition (w (i))7,000Post-acquisition profits (4,500 (w (v)) x 20%)900––––––7,900––––––2(a)Keystone – Statement of comprehensive income for the year ended 30 September 2011$’000$’000 Revenue (380,000 – 2,400 (w (i)))377,600Cost of sales (w (ii))(258,100)––––––––Gross profit119,500Distribution costs (14,200)Administrative expenses (46,400 – 24,000 dividend (50,000 x 5 x 2·40 x 4%))(22,400)Investment income800Loss on fair value of investments (18,000 – 17,400)(600)Finance costs (350)––––––––Profit before tax82,750Income tax expense (24,300 + 1,800 (w (v)))(26,100)––––––––Profit for the year56,650Other comprehensive incomeRevaluation of leased property8,000T ransfer to deferred tax (w (v))(2,400)5,600––––––––––––––T otal comprehensive income for the year 62,250––––––––(b)Keystone – Statement of financial position as at 30 September 2011$’000$’000 AssetsNon-current assetsProperty, plant and equipment (w (iv))78,000Financial asset: equity investments17,400––––––––95,400 Current assetsInventory (w (iii))56,600T rade receivables (33,550 – 2,400 (w (i))) 31,15087,750–––––––––––––––T otal assets183,150––––––––Equity and liabilitiesEquityEquity shares of 20 cents each50,000Revaluation reserve (w (iv))5,600Retained earnings (33,600 + 56,650 – 24,000 dividend paid) 66,25071,850–––––––––––––––121,850 Non-current liabilitiesDeferred tax (w (v))6,900Current liabilitiesT rade payables27,800Bank overdraft2,300Current tax payable24,30054,400–––––––––––––––T otal equity and liabilities183,150––––––––Workings (figures in brackets in $’000)(i)Where there is uncertainty over goods sold on a sale or return basis they should not be recognised as revenue until theyhave been formally accepted by the buyer. Thus $2·4 million should be removed from revenue and receivables. The goods should be added to the inventory at 30 September 2011 at their cost of $1·8 million (2·4 million x 75%).(ii)Cost of sales$’000 opening inventory46,700materials (64,000 – 3,000)61,000production labour (124,000 – 4,000)120,000factory overheads (80,000 – (4,000 x 75%))77,000Amortisation of leased property (w (iv))3,000Depreciation of plant (1,000 + 6,000 (w (iv)))7,000Closing inventory (w (iii))(56,600)––––––––258,100––––––––The cost of the self-constructed plant is $10 million (3,000 + 4,000 + 3,000 for materials, labour and overheads respectively that have also been deducted from the above items in cost of sales). It is not permissible to add a profit margin to self-constructed assets.(iii)Inventory at 30 September 2011:$’000 per count54,800goods on sale or return (w (i))1,800–––––––56,600–––––––(iv)Non-current assets:The leased property has been amortised at $2·5 million per annum (50,000/20 years). The accumulated amortisation of $10 million therefore represents four years, thus its remaining life at the date of revaluation is 16 years.$’000 carrying amount at date of revaluation (50,000 – 10,000)40,000revalued amount48,000–––––––gross gain on revaluation 8,000transfer to deferred tax (at 30%)(2,400)–––––––net gain to revaluation reserve5,600–––––––The revalued amount of $48 million will be amortised over its remaining life of 16 years at $3 million per annum.The self-constructed plant will be depreciated for six months by $1 million (10,000 x 20% x 6/12) and have a carryingamount at 30 September 2011 of $9 million. The plant in the trial balance will be depreciated by $6 million ((44,500– 14,500) x 20%) for the year and have a carrying amount at 30 September 2011 of $24 million.In summary:$’000 Leased property (48,000 – 3,000)45,000Plant (9,000 + 24,000)33,000–––––––Property, plant and equipment78,000–––––––(v)Deferred taxProvision required at 30 September 2011 ((15,000 + 8,000) x 30%)6,900Provision at 1 October 2010 (2,700)–––––––Increase required4,200Transferred from revaluation reserve (w (iv))(2,400)–––––––Balance: charge to income statement1,800–––––––3(a)Mocha – Statement of cash flows for the year ended 30 September 2011:(Note: figures in brackets are in $’000)Cash flows from operating activities:$’000$’000Profit before tax3,900Adjustments fordepreciation of non-current assets 2,500profit on the disposal of property, plant and equipment (8,100 – 4,000)(4,100)investment income(1,100)interest expense500increase in inventory (10,200 – 7,200)(3,000)decrease in receivables (3,700 – 3,500)200decrease in payables (4,600 – 3,200)(1,400)decrease in warranty provision (4,000 – 1,600)(2,400)–––––––Cash generated from operations (4,900)Interest paid(500)Income tax paid (w (i))(800)–––––––Net cash deficit from operating activities(6,200)Cash flows from investing activities:Purchase of property, plant and equipment(8,300)Disposal of property, plant and equipment8,100Disposal of investment3,400Dividends received200–––––––Net cash from investing activities3,400Cash flows from financing activities:Shares issued (w (ii))2,400Payment of finance lease obligations (w (iii))(3,900)–––––––Net cash from financing activities(1,500)–––––––Net decrease in cash and cash equivalents (4,300)Cash and cash equivalents at beginning of the year1,400–––––––Cash and cash equivalents at end of the year(2,900)–––––––Workings(i)Income tax paid:$’000Provision b/f–current(1,200)–deferred(900)Income statement tax charge (1,000)Provision c/f–current1,000–deferred1,300––––––Difference – cash paid(800)––––––(ii)Share issues$’000Increase in share capital (14,000 – 8,000)6,000Bonus issue–share premium(2,000)–revaluation reserve (3,600 – 2,000)(1,600)––––––Shares issued for cash at par2,400––––––(iii)Finance leaseBalance b/f–current(2,100)–non-current(6,900)New leases in year(6,700)Balance c/f–current4,800–non-current7,000––––––Principal repaid(3,900)––––––Tutorial note:Reconciliation of investments/investment income$’000InvestmentsBalance b/f7,000Carrying amount sold(3,000)Balance c/f(4,500)––––––Difference: increase in fair value500––––––Carrying amount sold3,000Proceeds(3,400)––––––Profit on sale in income statement400––––––Tutorial note:as the retained earnings at 30 September 2010 (10,100) plus the profit for the period (2,900) equalthe retained earnings at 30 September 2011 (13,000) there was no equity dividend paid.(b)(i)Mocha has reported an operating profit of $3·3 million (12,000 – 8,700) for the year ended 30 September 2011, whichis likely to give a favourable impression to shareholders. However, its cash generated from operations is a deficit of$4·9 million. The reconciling items of these two figures appear in the statement of cash flows and it can be seen thatoperating profit has been boosted by the profit on the sale of a property and a large decrease in the product warrantyprovision. Some commentators argue that a profit on the sale of non-current assets is not really an ‘operating’ profit andit is misleading to be classed as such. Also, many items included in operating profit are subjective (for example theproduct warranty provision), and as such can be subject to manipulation. Cash flows are unaffected by such subjectiveestimates and from this perspective they are considered less susceptible to manipulation and therefore more reliable.(ii)From the statement of financial position it can be seen that net investment in property, plant and equipment (after depreciation) has increased by $8·5 million (32,600 –24,100). This may give the impression that the company isinvesting heavily in property, plant and equipment, and in one sense it is. However, the statement of cash flows showsthat net cash investment in property, plant and equipment is only $200,000 (purchases of 8,300 less disposals of8,100). Most of the difference is due to a (non-cash) acquisition of plant under finance leases (meaning furtherborrowing) and disposal proceeds of plant and equipment in excess of its carrying amounts. The cash flow informationgives a somewhat different (and possibly more realistic) view of the company’s investment in property, plant andequipment during the year.4(a)IAS 37 Provisions, contingent liabilities and contingent assets defines provisions as liabilities of uncertain timing or amount that should be recognised where there is a present obligation (as a result of past events), it is probable (assumed to be more than a 50% chance) that there will be an outflow of economic benefits (to settle the obligation) and the amounts can be estimated reliably. The obligation may be legal or constructive.A contingent liability has more uncertainty in that it is a possible obligation (assumed to be less than a 50% chance) whoseexistence will be confirmed only by one or more future uncertain events that are not wholly within the control of the entity.An existing obligation where the amount cannot be reliably measured is also treated as a contingent liability.The Standard seeks to improve consistency in the reporting of provisions. In the past some entities created ‘general’ (rather than specific) provisions for liabilities that did not really exist (known as ‘big bath’ provisions); equally many entities did not recognise provisions where there was a present obligation. T he latter often related to deferred liabilities such as future environmental costs. T he effect of such inconsistencies was that comparability was weakened and profit was frequently manipulated.(b)(i)Although the information in the question says the environmental provision is not a legal obligation, it implies that it is aconstructive obligation (Borough has created an expectation that it will pay the environmental costs) and therefore thesecosts should be provided for. The obligation for the fixed element of the cost arose as soon as the extraction commenced,whereas the variable element accrues in line with the extraction of oil. The present value of the environmental cost isshown as a non-current liability (credit) with the debit added to the cost of the licence and (effectively) charged to incomeas part of the annual amortisation charge.The relevant extracts from Borough’s statement of financial position as at 30 September 2011 are:$’000Non-current assetLicence for oil extraction (50,000 + 20,000)70,000Amortisation (10 years)(7,000)–––––––Carrying amount63,000–––––––Non-current liabilityEnvironmental provision ((20,000 + (150,000 x 0·02 cents)) x 1·08 finance cost)24,840–––––––(ii)From Borough’s perspective, as a separate entity, the guarantee for Hamlet’s loan is a contingent liability of $10 million.As Hamlet is a separate entity, Borough has no liability for the secured amount of $15 million, not even for the potentialshortfall for the security of $3 million. The $10 million contingent liability would normally be described and disclosedin the notes to Borough’s entity financial statements.In Borough’s consolidated financial statements, the full liability of $25 million would be included in the statement offinancial position as part of the group’s consolidated non-current liabilities – there would be no contingent liabilitydisclosed.The concerns over the potential survival of Hamlet due to the effects of the recession may change the disclosure inBorough’s entity financial statements. If Borough deems it probable that Hamlet is not a going concern the $10 millionloan, which was previously a contingent liability, would become an actual liability and should be provided for onBorough’s entity statement of financial position and disclosed as a current (not a non-current) liability.5(a)(i)The interest rate (5%) for the convertible loan notes is lower because of the potential value of the conversion option.The cost of equivalent loan notes without the option is 8%, the difference is mainly due to the market expectation of thehigher worth of Bertrand’s equity shares (compared to the cash alternative) when the loan notes are due for redemption.From the entity’s viewpoint, the conversion option means lower payments of interest (to help cash flow), but it willeventually cause a dilution of earnings.(ii)If the directors’ treatment were acceptable, the use of the conversion option (compared to issuing non-convertible loans) would improve profit and earnings per share because of lower interest rates (and hence interest charges) and thecompany’s gearing would be lower as the loan notes would not be shown as debt. However, this proposed treatment isnot acceptable. A convertible loan note is a complex (hybrid) financial instrument and IFRS requires that the proceedsof the issue should be allocated between equity (the value of the option) and debt and the finance charge should bebased on that of an equivalent non-convertible loan (8% in this case).(b)Extracts from the financial statements of BertrandIncome statement for the year ended 30 September 2011$’000 Finance costs (9,190 x 8%)735rounded Statement of financial position as at 30 September 2011EquityEquity option810Non-current liabilities8% convertible loan notes ((9,190 x 1·08) – 500)9,425rounded WorkingYear ended Cash flow Discount rate Discounted cash flows30 September $’000at 8%$’00020115000·9346520125000·86430201310,5000·798,295–––––––value of debt component9,190value of equity option component (= balance)810–––––––total proceeds 10,000–––––––Fundamentals Level – Skills Module, Paper F7 (INT)Financial Reporting (International)December 2011 Marking SchemeThis marking scheme is given as a guide in the context of the suggested answers. Scope is given to markers to award marks for alternative approaches to a question, including relevant comment, and where well-reasoned conclusions are provided. This is particularly the case for written answers where there may be more than one acceptable solution.Marks1property, plant and equipment2½goodwill5other intangibles2½investment in associate2inventory1receivables1bank½equity shares½retained earnings 5non-controlling interest 2deferred tax½bank overdraft½deferred consideration1trade payables1Total for question252(a)Income statementrevenue1cost of sales7distribution costs½administrative expenses 1½investment income1loss on fair value of investment1finance costs½income tax expense1½other comprehensive income 115(b)Statement of financial positionproperty, plant and equipment2equity investments½inventory ½trade receivables1equity shares ½revaluation reserve1½retained earnings1½deferred tax1trade payables½bank overdraft½current tax payable½10Total for question25Marks 3(a)profit before tax½depreciation1profit on disposal of property (deducted) 1investment income adjustment (deducted)½interest expense adjustment (added back)½working capital items1½decrease in warranty provisions1½interest paid (cash flow)1income tax paid2purchase of property, plant and equipment 1disposal of property, plant and equipment 1disposal of investment1investment income (dividends received)1share issue2½payment of finance lease obligations2cash b/f½cash c/f½19(b)(i)and (ii)3 marks each 6Total for question254(a)definition of provisions2 definition of contingent liabilities2how the Standard improves comparability26(b)(i)it is a constructive obligation1explanation of treatment1non-current asset (including amortisation) 1½environmental provision (including unwinding of discount)1½(ii)entity financial statements contingent liability of $10 million1 no obligation for secured $15 million 1consolidated statements show full $25 million as a liability1if not a going concern, guarantee would be shown as an actual (current)liability in entity financial statements 19Total for question155(a)(i) 1 mark per valid point 2 (ii) 1 mark per valid point3(b)finance cost2value of equity option1value of debt at 30 September 201125Total for question10。
2014年12月ACCA F5考试真题_东亚国际
P a p e r F 5Section A – ALL 20 questions are compulsory and MUST be attemptedPlease use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to each multiple choice question.Each question is worth 2 marks.1Dust Co has two divisions, A and B. Each division is currently considering the following separate projects:Division A Division BCapital required for the project$32·6 million$22·2 millionSales generated by project$14·4 million$8·8 millionOperating profit margin30%24%Cost of capital10%10%Current return on investment of division15%9%If residual income is used as the basis for the investment decision, which Division(s) would choose to invest in the project?A Division A onlyB Division B onlyC Both Division A and Division BD Neither Division A nor Division B2The following costs have arisen in relation to the production of a product:(i)Planning and concept design costs(ii)T esting costs(iii)Production costs(iv)Distribution and customer service costsIn calculating the life cycle costs of a product, which of the above items would be included?A(iii) onlyB(i), (ii) and (iii) onlyC(i), (ii) and (iv) onlyD All of the above3Which of the following describes a ‘basic standard’ within the context of budgeting?A A standard which is kept unchanged over a period of timeB A standard which is based on current price levelsC A standard set at an ideal level, which makes no allowance for normal losses, waste and machine downtimeD A standard which assumes an efficient level of operation, but which includes allowances for factors such asnormal loss, waste and machine downtime4The following statements have been made about planning and control as described in the three tiers of Robert Anthony’s decision-making hierarchy:(1)Strategic planning is concerned with making decisions about the efficient and effective use of existing resources(2)Operational control is about ensuring that specific tasks are carried out efficiently and effectivelyWhich of the above statements is/are true?A 1 onlyB 2 onlyC Neither 1 nor 2D Both 1 and 225P Co makes two products – P1 and P2 – budgeted details of which are as follows:P1P2$$Selling price10·008·00Cost per unit:Direct materials3·504·00Direct labour1·501·00Variable overhead0·600·40Fixed overhead1·201·00––––––––––Profit per unit3·201·60––––––––––Budgeted production and sales for the year ended 30 November 2015 are:Product P110,000 unitsProduct P212,500 unitsThe fixed overhead costs included in P1 relate to apportionment of general overhead costs only. However, P2 also includes specific fixed overheads totalling $2,500.If only product P1 were to be made, how many units (to the nearest unit) would need to be sold in order to achieve a profit of $60,000 each year?A25,625 unitsB19,205 unitsC18,636 unitsD26,406 units6 A company has the following production planned for the next four weeks. The figures reflect the full capacity level ofoperations. Planned output is equal to the maximum demand per product.Product A B C D$ per unit$ per unit$ per unit$ per unit Selling price 160214100140 Raw material cost24562240 Direct labour cost 66883322 Variable overhead cost24182418 Fixed overhead cost16108 12––––––––––––––––Profit 30421348––––––––––––––––Planned output300125240400 Direct labour hours per unit6832 The direct labour force is threatening to go on strike for two weeks out of the coming four. This means that only 2,160 hours will be available for production rather than the usual 4,320 hours.If the strike goes ahead, which product or products should be produced if profits are to be maximised?A D and AB B and DC D onlyD B and C3[P.T.O.7The following table shows the number of clients who attended a particular accountancy practice over the last four weeks and the total costs incurred during each of the weeks:Week Number of clients Total cost$140036,880244039,840342036,800446040,000Applying the high low method to the above information, which of the following could be used to forecast total cost ($) from the number of clients expected to attend (where x = the expected number of clients)?A7,280 + 74xB16,080 + 52xC3,200 + 80xD40,000/x8Oxco has two divisions, A and B. Division A makes a component for air conditioning units which it can only sell to Division B. It has no other outlet for sales.Current information relating to Division A is as follows:Marginal cost per unit$100T ransfer price of the component$165T otal production and sales of the component each year2,200unitsSpecific fixed costs of Division A per year$10,000Cold Co has offered to sell the component to Division B for $140 per unit. If Division B accepts this offer, Division A will be shut.If Division B accepts Cold Co’s offer, what will be the impact on profits per year for the group as a whole?A Increase of $65,000B Decrease of $78,000C Decrease of $88,000D Increase of $55,0009The following statements have been made in relation to activity-based costing:(1) A cost driver is a factor which causes a change in the cost of an activity(2)T raditional absorption costing tends to under-estimate overhead costs for high volume productsWhich of the above statements is/are true?A 1 onlyB 2 onlyC Neither 1 nor 2D Both 1 and 2410 A linear programming model has been formulated for two products, X and Y. The objective function is depicted by theformula C = 5X + 6Y, where C = contribution, X = the number of product X to be produced and Y = the number of product Y to be produced.Each unit of X uses 2 kg of material Z and each unit of Y uses 3 kg of material Z. The standard cost of material Z is $2 per kg.The shadow price for material Z has been worked out and found to be $2·80 per kg.If an extra 20 kg of material Z becomes available at $2 per kg, what will the maximum increase in contribution be?A Increase of $96B Increase of $56C Increase of $16D No change11The following statements have been made about both standard costing and total quality management (TQM):(1)They focus on assigning responsibility solely to senior managers(2)They work well in rapidly changing environmentsWhich of the above statements is/are true?A 1 onlyB 2 onlyC Neither 1 nor 2D Both 1 and 212The following statements have been made about environmental cost accounting:(1)The majority of environmental costs are already captured within a typical organisation’s accounting system. Thedifficulty lies in identifying them(2) Input/output analysis divides material flows within an organisation into three categories: material flows; systemflows; and delivery and disposal flowsWhich of the above statements is/are true?A 1 onlyB 2 onlyC Neither 1 nor 2D Both 1 and 25[P.T.O.13Def Co provides accounting services to government departments. On average, each staff member works six chargeable hours per day, with the rest of their working day being spent on non-chargeable administrative work. One of the company’s main objectives is to produce a high level of quality and customer satisfaction.Def Co has set its targets for the next year as follows:(1)Cutting departmental expenditure by 5%(2)Increasing the number of chargeable hours handled by advisers to 6·2 per day(3)Obtaining a score of 4·7 or above on customer satisfaction surveysWhich of the above targets assesses economy, efficiency and effectiveness at Def Co?Economy Efficiency EffectivenessA132B213C321D12314Which of the following is an advantage of non-participative budgeting as compared to participative budgeting?A It increases motivationB It is less time consumingC It increases acceptanceD The budgets produced are more attainable15The following are all steps in the implementation of the target costing process for a product:(1)Calculate the target cost(2)Calculate the estimated current cost based on the existing product specification(3)Set the required profit(4)Set the selling price(5)Calculate the target cost gapWhich of the following represents the correct sequence if target costing were to be used?A(1), (2), (3), (4), (5)B(2), (3), (4), (1), (5)C(4), (3), (1), (2), (5)D(4), (5), (3), (1), (2)16What is the name given to a budget which has been prepared by building on a previous period’s budgeted or actual figures?A Incremental budgetB Flexible budgetC Zero based budgetD Functional budget617T ree Co is considering employing a sales manager. Market research has shown that a good sales manager can increase profit by 30%, an average one by 20% and a poor one by 10%. Experience has shown that the company has attracted a good sales manager 35% of the time, an average one 45% of the time and a poor one 20% of the time.The company’s normal profits are $180,000 per annum and the sales manager’s salary would be $40,000 per annum.Based on the expected value criterion, which of the following represents the correct advice which Tree Co should be given?A Do not employ a sales manager as profits would be expected to fall by $1,300B Employ a sales manager as profits will increase by $38,700C Employ a sales manager as profits are expected to increase by $100D Do not employ a sales manager as profits are expected to fall by $39,90018 A company manufactures two products, C and D, for which the following information is available:Product C Product D TotalBudgeted production (units)1,0004,0005,000Labour hours per unit/in total81048,000Number of production runs required131528Number of inspections during production538T otal production set up costs$140,000T otal inspection costs$80,000Other overhead costs$96,000Other overhead costs are absorbed on the basis of labour hours per unit.Using activity-based costing, what is the budgeted overhead cost per unit of product D?A$43·84B$46·25C$131·00D$140·6419X Co uses rolling budgeting, updating its budgets on a quarterly basis. After carrying out the last quarter’s update to the cash budget, it projected a forecast cash deficit of $400,000 at the end of the year. Consequently, the planned purchase of new capital equipment has been postponed.Which of the following types of control is the sales manager’s actions an example of?A Feedforward controlB Negative feedback controlC Positive feedback controlD Double loop feedback control7[P.T.O.20The following circumstances may arise in relation to the launch of a new product:(i)Demand is relatively inelastic(ii)There are significant economies of scale(iii)The firm wishes to discourage new entrants to the market(iv)The product life cycle is particularly shortWhich of the above circumstances favour a penetration pricing policy?A(ii) and (iii) onlyB(ii) and (iv)C(i), (ii) and (iii)D(ii), (iii) and (iv) only(40 marks)8Section B –ALL FIVE questions are compulsory and MUST be attempted1Chair Co has developed a new type of luxury car seat. The estimated labour time for the first unit is 12 hours but a learning curve of 75% is expected to apply for the first eight units produced. The cost of labour is $15 per hour. The cost of materials and other variable overheads is expected to total $230 per unit.Chair Co plans on pricing the seat by adding a 50% mark-up to the total variable cost per seat, with the labour cost being based on the incremental time taken to produce the 8th unit.Required:(a)Calculate the price which Chair Co expects to charge for the new seat.Note: The learning index for a 75% learning curve is –0·415.(5 marks)(b)The first phase of production has now been completed for the new car seat. The first unit actually took12·5 hours to make and the total time for the first eight units was 34·3 hours, at which point the learning effect came to an end. Chair Co are planning on adjusting the price to reflect the actual time it took to complete the 8th unit.Required:(i)Calculate the actual rate of learning and state whether this means that the labour force actually learntmore quickly or less quickly than expected. (3 marks) (ii)Briefly explain whether the adjusted price charged by Chair Co will be higher or lower than the price you calculated in part (a) above. You are NOT required to calculate the adjusted price.(2 marks)(10 marks)9[P.T.O.2Glam Co is a hairdressing salon which provides both ‘cuts’ and ‘treatments’ to clients. All cuts and treatments at the salon are carried out by one of the salon’s three senior stylists. The salon also has two salon assistants and two junior stylists.Every customer attending the salon is first seen by a salon assistant, who washes their hair; next, by a senior stylist, who cuts or treats the hair depending on which service the customer wants; then finally, a junior stylist who dries their hair. The average length of time spent with each member of staff is as follows:Cut TreatmentHours HoursAssistant0·10·3Senior stylist11·5Junior stylist0·50·5The salon is open for eight hours each day for six days per week. It is only closed for two weeks each year. Staff salaries are $40,000 each year for senior stylists, $28,000 each year for junior stylists and $12,000 each year for the assistants. The cost of cleaning products applied when washing the hair is $0·60 per client. The cost of all additional products applied during a ‘treatment’ is $7·40 per client. Other salon costs (excluding labour and raw materials) amount to $106,400 each year.Glam Co charges $60 for each cut and $110 for each treatment.The senior stylists’ time has been correctly identified as the bottleneck activity.Required:(a) Briefly explain why the senior stylists’ time has been described as the ‘bottleneck activity’, supporting youranswer with calculations.(4 marks)(b)Calculate the throughput accounting ratio (TPAR) for ‘cuts’ and the TPAR for ‘treatments’ assuming thebottleneck activity is fully utilised.(6 marks)(10 marks)103The Hi Life Co (HL Co) makes sofas. It has recently received a request from a customer to provide a one-off order of sofas, in excess of normal budgeted production. The order would need to be completed within two weeks. The following cost estimate has already been prepared:Direct materials:Note$Fabric200 m2at $17 per m213,400Wood50 m at $8·20 per m22410Direct labour:Skilled200 hours at $16 per hour33,200Semi-skilled300 hours at $12 per hour43,600Factory overheads500 hours at $3 per hour51,500–––––––T otal production cost12,110Administration overheads at 10% of total production cost61,211–––––––T otal cost13,321–––––––Notes1The fabric is regularly used by HL Co. There are currently 300 m2in inventory, which cost $17 per m2. The current purchase price of the fabric is $17·50 per m2.2This type of wood is regularly used by HL Co and usually costs $8·20 per m2. However, the company’s current supplier’s earliest delivery time for the wood is in three weeks’ time. An alternative supplier could deliver immediately but they would charge $8·50 per m2. HL Co already has 500 m2in inventory but 480 m2of this is needed to complete other existing orders in the next two weeks. The remaining 20 m2is not going to be needed until four weeks’ time.3The skilled labour force is employed under permanent contracts of employment under which they must be paid for 40 hours’ per week’s labour, even if their time is idle due to absence of orders. Their rate of pay is $16 per hour, although any overtime is paid at time and a half. In the next two weeks, there is spare capacity of 150 labour hours.4There is no spare capacity for semi-skilled workers. They are currently paid $12 per hour or time and a half for overtime. However, a local agency can provide additional semi-skilled workers for $14 per hour.5The $3 absorption rate is HL Co’s standard factory overhead absorption rate; $1·50 per hour reflects the cost of the factory supervisor’s salary and the other $1·50 per hour reflects general factory costs. The supervisor is paid an annual salary and is also paid $15 per hour for any overtime he works. He will need to work 20 hours’overtime if this order is accepted.6This is an apportionment of the general administration overheads incurred by HL Co.Required:Prepare, on a relevant cost basis, the lowest cost estimate which could be used as the basis for the quotation.Explain briefly your reasons for including or excluding each of the costs in your estimate.(10 marks)4Jamair was founded in September 2007 and is one of a growing number of low-cost airlines in the country of Shania.Jamair’s strategy is to operate as a low-cost, high efficiency airline, and it does this by:–Operating mostly in secondary cities to reduce landing costs.–Using only one type of aircraft in order to reduce maintenance and operational costs. These planes are leased rather than bought outright.–Having only one category of seat class.–Having no pre-allocated seats or in-flight entertainment.–Focusing on e-commerce with customers both booking tickets and checking in for flights online.The airline was given an ‘on time arrival’ ranking of seventh best by the country’s aviation authority, who rank all 50 of the country’s airlines based on the number of flights which arrive on time at their destinations. 48 Jamair flights were cancelled in 2013 compared to 35 in 2012. This increase was due to an increase in the staff absentee rate at Jamair from 3 days per staff member per year to 4·5 days.The average ‘ground turnaround time’ for airlines in Shania is 50 minutes, meaning that, on average, planes are on the ground for cleaning, refuelling, etc for 50 minutes before departing again. Customer satisfaction surveys have shown that 85% of customers are happy with the standard of cleanliness on Jamair’s planes.The number of passengers carried by the airline has grown from 300,000 passengers on a total of 3,428 flights in 2007 to 920,000 passengers on 7,650 flights in 2013. The overall growth of the airline has been helped by the limited route licensing policy of the Shanian government, which has given Jamair almost monopoly status on some of its routes. However, the government is now set to change this policy with almost immediate effect, and it has become more important than ever to monitor performance effectively.Required:(a)Describe each of the four perspectives of the balanced scorecard. (6 marks)(b)For each perspective of the balanced scorecard, identify one goal together with a corresponding performancemeasure which could be used by Jamair to measure the company’s performance. The goals and measures should be specifically relevant to Jamair. For each pair of goals and measures, explain why you have chosen them.(9 marks)(15 marks)5The Safe Soap Co makes environmentally-friendly soap using three basic ingredients. The standard cost card for one batch of soap for the month of September was as follows:Material Kilograms Price per kilogram ($)Lye0·25 10Coconut oil0·64Shea butter0·53The budget for production and sales in September was 120,000 batches. Actual production and sales were 136,000 batches. The actual ingredients used were as follows:Material KilogramsLye34,080Coconut oil83,232Shea butter64,200Required:(a)Calculate the total material mix variance and the total material yield variance for September.(8 marks)(b)In October the materials mix and yield variances were as follows:Mix: $6,000 adverseYield: $10,000 favourableThe production manager is pleased with the results overall, stating:‘At the beginning of September I made some changes to the mix of ingredients used for the soaps. As I expected, the mix variance is adverse in both months because we haven’t yet updated our standard cost card but, in both months, the favourable yield variance more than makes up for this. Overall, I think we can be satisfied that the changes made to the product mix are producing good results and now we are able to produce more batches and meet the growing demand for our product.’The sales manager, however, holds a different view and says:‘I’m not happy with this change in the ingredients mix. I’ve had to explain to the board why the sales volume variance for October was $22,000 adverse. I’ve tried to explain that the quality of the soap has declined slightly and some of my customers have realised this and simply aren’t happy but no-one seems to be listening. Some customers are even demanding that the price of the soap be reduced and threatening to go elsewhere if the problem isn’t sorted out.’Required:(i)Briefly explain what the adverse materials mix and favourable materials yield variances indicate aboutproduction at Safe Soap Co in October.Note: You are NOT required to discuss revision of standards or operational and planning variances.(4 marks)(ii)Discuss whether the sales manager could be justified in claiming that the change in the materials mix has caused an adverse sales volume variance in October.(3 marks)(15 marks)Formulae Sheet Learning curve Y = ax bDemand curve Where Y =cumulative average time per unit to produce x unitsa =the time taken for the first unit of output x =the cumulative number of units producedb =the index of learning (log LR/log2)LR =the learning rate as a decimalP =a –bQ b =change in price change in quantitya =price when Q =0MR =a –2bQEnd of Question Paper。
2014年12月ACCA P4考试真题
Advanced Financial ManagementTuesday 2 December 2014Time allowedReading and planning: 15 minutesWriting: 3 hoursThis paper is divided into two sections:Section A – This ONE question is compulsory and MUST be attempted Section B – TWO questions ONLY to be attemptedFormulae and tables are on pages 8–12.Do NOT open this paper until instructed by the supervisor.During reading and planning time only the question paper maybe annotated. You must NOT write in your answer booklet until instructed by the supervisor.This question paper must not be removed from the examination hall.The Association of Chartered Certified AccountantsSection A – This ONE question is compulsory and MUST be attempted1 Nahara Co and Fugae CoNahara Co is a private holding company owned by the government of a wealthy oil-rich country to invest its sovereign funds. Nahara Co has followed a strategy of risk diversification for a number of years by acquiring companies from around the world in many different sectors.One of Nahara Co’s acquisition strategies is to identify and purchase undervalued companies in the airline industry in Europe. A recent acquisition was Fugae Co, a company based in a country which is part of the European Union (EU). Fugae Co repairs and maintains aircraft engines.A few weeks ago, Nahara Co stated its intention to pursue the acquisition of an airline company based in the samecountry as Fugae Co. The EU, concerned about this, asked Nahara Co to sell Fugae Co before pursuing any further acquisitions in the airline industry.Avem Co’s acquisition interest in Fugae CoAvem Co, a UK-based company specialising in producing and servicing business jets, has approached Nahara Co with a proposal to acquire Fugae Co for $1,200 million. Nahara Co expects to receive a premium of at least 30% on the estimated equity value of Fugae Co, if it is sold.Given below are extracts from the most recent statements of financial position of both Avem Co and Fugae Co.Avem Co $ million800 Fugae Co $ million 100Share capital (50c/share)Reserves 3,550 160Non-current liabilities Current liabilities2,200 380130 30 ––––––––––Total capital and liabilities 6,680 670––––––––––Each Avem Co share is currently trading at $7·50, which is a multiple of 7·2 of its free cash flow to equity. Avem Co expects that the total free cash flows to equity of the combined company will increase by $40 million due to synergy benefits. After adding the synergy benefits of $40 million, Avem Co then expects the multiple of the total free cash flow of the combined company to increase to 7·5.Fugae Co’s free cash flow to equity is currently estimated at $76·5 million and it is expected to generate a return on equity of 11%. Over the past few years, Fugae Co has returned 77·3% of its annual free cash flow to equity back to Nahara Co, while retaining the balance for new investments.Fugae Co’s non-current liabilities consist entirely of $100 nominal value bonds which are redeemable in four years at the nominal value, on which the company pays a coupon of 5·4%. The debt is rated at B+ and the credit spread onB+ rated debt is 80 basis points above the risk-free rate of return.Proposed luxury transport investment project by Fugae CoIn recent years, the country in which Fugae Co is based has been expanding its tourism industry and hopes that this industry will grow significantly in the near future. At present tourists normally travel using public transport and taxis, but there is a growing market for luxury travel. If the tourist industry does expand, then the demand for luxury travel is expected to grow rapidly. Fugae Co is considering entering this market through a four-year project. The project will cease after four years because of increasing competition.The initial cost of the project is expected to be $42,000,000 and it is expected to generate the following after-tax cash flows over its four-year life:Year 1 2 3 4Cash flows ($000s) 3,277.6 16,134.3 36,504.7 35,683.6The above figures are based on the tourism industry expanding as expected. However, it is estimated that there is a 25% probability that the tourism industry will not grow as expected in the first year. If this happens, then the present value of the project’s cash f lows will be 50% of the original estimates over its four-year life.It is also estimated that if the tourism industry grows as expected in the first year, there is still a 20% probability that the expected growth will slow down in the second and subsequent years, and the present value of the project’s cash flows would then be 40% of the original estimates in each of these years.Lumi Co, a leisure travel company, has offered $50 million to buy the project from Fugae Co at the start of the second year. Fugae Co is considering whether having this choice would add to the value of the project.If Fugae Co is bought by Avem Co after the project has begun, it is thought that the project will not result in any additional synergy benefits and will not generate any additional value for the combined company, above any value the project has already generated for Fugae Co.Although there is no beta for companies offering luxury forms of travel in the tourist industry, Reka Co, a listed company, offers passenger transportation services on coaches, trains and luxury vehicles. About 15% of its business is in the luxury transport market and Reka Co’s equity beta is 1·6. It is estimated that the asset beta of the non-luxury transport industry is 0·80. Reka C o’s shares are currently trading at $4·50 per share and its debt is currently tradingat $105 per $100. It has 80 million shares in issue and the book value of its debt is $340 million. The debt beta is estimated to be zero.General informationThe corporation tax rate applicable to all companies is 20%. The risk-free rate is estimated to be 4% and the market risk premium is estimated to be 6%.Required:(a) Discuss whether or not Nahara Co’s acquisition strategies, of pursuing risk diversification and of purchasingundervalued companies, can be valid. (7 marks)(b) Discuss why the European Union (EU) may be concerned about Nahara Co’s stated intention and how sellingFugae Co could reduce this concern. (4 marks)(c) Prepare a report for the Board of Directors of Avem Co, which:(i) Estimates the additional value created for Avem Co, if it acquires Fugae Co without considering theluxury transport project; (10 marks) (ii) Estimates the additional value of the luxury transport project to Fugae Co, both with and without the offer from Lumi Co; (18 marks) (iii) Evaluates the benefit attributable to Avem Co and Fugae Co from combining the two companies with and without the project, and concludes whether or not the acquisition is beneficial. The evaluationshould include any assumptions made. (7 marks) Professional marks will be awarded in part (c) for the format, structure and presentation of the report.(4 marks)(50 marks)Section B – TWO questions ONLY to be attempted2 Keshi Co is a large multinational company with a number of international subsidiary companies. A centralised treasurydepartment manages Keshi Co and its subsidiaries’ borrowing requirements, cash surplus investment and financial risk management. Financial risk is normally managed using conventional derivative products such as forwards, futures, options and swaps.Assume it is 1 December 2014 today and Keshi Co is expecting to borrow $18,000,000 on 1 February 2015 for a period of seven months. It can either borrow the funds at a variable rate of LIBOR plus 40 basis points or a fixed rate of 5·5%. LIBOR is currently 3·8% but Keshi Co feels that this could increase or decrease by 0·5% over the coming months due to increasing uncertainty in the markets.The treasury department is considering whether or not to hedge the $18,000,000, using either exchange-traded March options or over-the-counter swaps offered by Rozu Bank.The following information and quotes for $ March options are provided from an appropriate exchange. The options are based on three-month $ futures, $1,000,000 contract size and option premiums are in annual %.March calls 0·882 Strike price95·50March puts0·6620·648 96·00 0·902Option prices are quoted in basis points at 100 minus the annual % yield and settlement of the options contracts isat the end of March 2015. The current basis on the March futures price is 44 points; and it is expected to be33 points on 1 January 2015, 22 points on 1 February 2015 and 11 points on 1 March 2015.Rozu Bank has offered Keshi Co a swap on a counterparty variable rate of LIBOR plus 30 basis points or a fixed rate of 4·6%, where Keshi Co receives 70% of any benefits accruing from undertaking the swap, prior to any bank charges. Rozu Bank will charge Keshi Co 10 basis points for the swap.Keshi Co’s chief executive officer believes that a centralised treasury department is necessary in order to increase shareholder value, but Keshi Co’s new chief financial officer (CFO) thinks that having decentralised treasury departments operating across the subsidiary companies could be more beneficial. The CFO thinks that this is particularly relevant to the situation which Suisen Co, a company owned by Keshi Co, is facing.Suisen Co operates in a country where most companies conduct business activities based on Islamic finance principles. It produces confectionery products including chocolates. It wants to use Salam contracts instead of commodity futures contracts to hedge its exposure to price fluctuations of cocoa. Salam contracts involve a commodity which is sold based on currently agreed prices, quantity and quality. Full payment is received by the seller immediately, for an agreed delivery to be made in the future.Required:(a) Based on the two hedging choices Keshi Co is considering, recommend a hedging strategy for the$18,000,000 borrowing. Support your answer with appropriate calculations and discussion. (15 marks)(b) Discuss how a centralised treasury department may increase value for Keshi Co and the possible reasons fordecentralising the treasury department. (6 marks)(c) Discuss the key differences between a Salam contract, under Islamic finance principles, and futurescontracts. (4 marks)(25 marks)3 Riviere Co is a small company based in the European Union (EU). It produces high quality frozen food which it exportsto a small number of supermarket chains located within the EU as well. The EU is a free trade area for trade between its member countries.Riviere Co finds it difficult to obtain bank finance and relies on a long-term strategy of using internally generated funds for new investment projects. This constraint means that it cannot accept every profitable project and often has to choose between them.Riviere Co is currently considering investment in one of two mutually exclusive food production projects: Privi and Drugi. Privi will produce and sell a new range of frozen desserts exclusively within the EU. Drugi will produce and sell a new range of frozen desserts and savoury foods to supermarket chains based in countries outside the EU. Each project will last for five years and the following financial information refers to both projects.Project Drugi, annual after-tax cash flows expected at the end of each year (€000s)Year Current 1 2 3 4 5Cash flows (€000s) (11,840) 1,230 1,680 4,350 10,240 2,200Privi DrugiNet present valueInternal rate of returnModified internal rate of return Value at risk (over the project’s life) 95% confidence level €2,054,00017·6%13·4%€2,293,000Not providedNot provided€1,103,500€860,000Not providedNot provided90% confidence levelBoth projects’ net present value has been calculated based on Riviere Co’s nominal cost of capital of 10%. It can be assumed that both projects’ cash flow returns are normally distributed and the annual standard deviation of project Drugi’s present value of after-tax cash flows is estimated to be €400,000. It can also be assumed that all sales are made in € (Euro) and therefore the company is not exposed to any foreign exchange exposure.Notwithstanding how profitable project Drugi may appear to be, Riviere Co’s board of directors is concerned about the possible legal risks if it invests in the project because they have never dealt with companies outside the EU before. Required:(a) Discuss the aims of a free trade area, such as the European Union (EU), and the possible benefits toRiviere Co of operating within the EU. (5 marks) (b) Calculate the figures which have not been provided for project Drugi and recommend which project shouldbe accepted. Provide a justification for the recommendation and explain what the value at risk measures.(13 marks)(c) Discuss the possible legal risks of investing in project Drugi which Riviere Co may be concerned about andhow these may be mitigated. (7 marks)(25 marks)4 Kamala Co, a listed company, manufactures parts and machinery for the construction industry. About five years ago,Kamala Co started to manufacture parts and machinery for hospitals and companies engaged in biomedical research using largely the same manufacturing and processing systems it already had in place. In 2011, a young and ambitious chief executive officer (CEO) took over the running of the company.With the publication of the latest financial statements for the year to 30 November 2014, the CEO made a briefstatement and it includes the following two points:–The CEO was very pleased with growth in the financial ratios provided and sales revenue from 2012 to 2014.More pleasing was growth in the share price, which increased even faster than the growth in the market index,suggesting that Kamala Co has been a successful company.–The CEO expressed a desire to make Kamala Co the leading manufacturer of parts and machinery for the construction industry by acquiring a major rival manufacturer in 2015, and financing the acquisition through anissue of a new bond and a small rights issue.An analyst, after examining the recent financial statements and the two points above, was less positive about Kamala Co’s future prospects.Given below are extracts from the recent financial statements, some ratios, and other financial information for Kamala Co.Kamala CoYear ending 30 November (all amounts in $m)2012 2013 2014Sales revenue 3,760 4,054 5,230––––––––––––––––––Operating profit Finance costs714 819 1,09897 168 269 ––––––––––––––––––Profit before tax Taxation617 651 829 154 163 207 ––––––––––––––––––Profit for the year Dividends463 488 622––––––––––––––––––139 137 152Kamala CoYear ending 30 November (all amounts in $m)2012 2013 2014Total non-current assets Total current assets3,962 5,507 7,669 980 1,410 1,880 ––––––––––––––––––Total non-current and current assets 4,942 6,917 9,549––––––––––––––––––EquityOrdinary shares ($0·25) Reserves750 750 750 1,476 1,827 2,297 ––––––––––––––––––Total equity 2,226 2,577 3,047––––––––––––––––––Non-current liabilitiesBank loans 476 1,176 1,316 Bonds 1,008 1,008 2,218––––––––––––––––––Total non-current liabilities 1,484 2,184 3,534––––––––––––––––––Current liabilitiesTrade and other payables Bank overdraft1,232 1,540 2,016 –––––––616 952––––––––––––Total current liabilities 1,232 2,156 2,968––––––––––––––––––Total non-current and current liabilities 2,716 4,340 6,502––––––––––––––––––Kamala Co: By activityYear ending 30 November (all amounts in $m)20122013 2014 Sales revenueConstructionHospitals and biomedical 2,420 1,340 2,644 1,410 3,660 1,570 Operating profitConstructionHospitals and biomedical 460 254489 330693 405Ratios: Kamala Co2012 19·0% 3·3 2013 20·2% 3·6 2014 21·0% 4·1 Operating profit margin Dividend cover Earnings per shareGearing [(debt/debt + equity)] 15·4c 40%16·3c 46%20·7c 54%Other financial information30 November2012 30 November2013 30 November2014 Kamala Co share price ($) Market index Industry index1·69 4,539 840 2·01 5,447 1,092 2·69 6,550 1,422 Industry average PE ratio9·2:112·1:115·3:12013 ($m)2014 ($m) Depreciation deducted to arrive at the operating profit (equivalent to tax allowable depreciation) Economic depreciation826 990 1501,150 1,380 170Non-cash expenses (excluding depreciation)Kamala Co’s cost of capital is estimated to be 10%. The company’s corporation tax rate is 25%. Required:(a) Discuss the advantages and drawbacks of using the economic value added (EVA company’s performance. TM ) technique to assess a(6 marks)(b) Estimate Kamala Co’s EVA for the years ending 30 November 2013 and 30 November 2014. (5 marks)TM(c) Evaluate Kamala Co’s performance and conclude whether the analyst’s opinion or the chief executive officer’s opinion has the greater validity. Include any additional ratio and activity trends, and share priceanalysis, which are deemed to be relevant to the evaluation.(14 marks) (25 marks)FormulaeModigliani and Miller Proposition 2 (with tax)V d V ek e =k ie +(1–T)(k ie –k d )The Capital Asset Pricing ModelE(r i )=R f +®i (E(r m )–R f )The asset beta formula⎩ ⎤ ⎩ ⎤ V eV d (1–T) ®a =⎪ ®e ⎥+⎪ ®d ⎥⎪(V e +V d (1–T)) ⎥ ⎪(V e +V d (1–T)) ⎥ ⎦⎦The Growth Model P o =D o (1+g)(r e –g)Gordon’s growth approximationg =br eThe weighted average cost of capital ⎩ ⎤ ⎥ ⎩ ⎤⎥ V e +V V d +V WACC =⎪ k e +⎪⎪ k d (1–T)⎪ V ⎥ ⎦ V ⎥⎦e d e d The Fisher formula (1+i)=(1+r)(1+h)Purchasing power parity and interest rate parity (1+h ) c F 0 =S 0x(1+i c ) S 1=S 0x(1+h b )(1+i b )Modified Internal Rate of Return1nMIRR =⎪⎩PV ⎤ ( )R ⎥ 1+r e –1⎪PV ⎥ ⎦I The Black-Scholes option pricing modelc =P a N(d 1)–Pe N(d 2e ) –rtWhere:d =ln(P a /Pe )+(r+0.5s 2 )t1s td 2 =d 1–s tThe Put Call Parity relationshipp =c –P a +P e e –rtPresent Value TablePresent value of 1 i.e. (1 +r)–nWhere r = discount raten = number of periods until paymentDiscount rate (r)Periods(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%12345 0·9900·9800·9710·9610·9510·9800·9610·9420·9240·9060·9710·9430·9150·8880·8630·9620·9250·8890·8550·8220·9520·9070·8640·8230·7840·9430·8900·8400·7920·7470·9350·8730·8160·7630·7130·9260·8570·7940·7350·6810·9170·8420·7720·7080·6500·9090·8260·7510·6830·62112345678910 0·9420·9330·9230·9140·9050·8880·8710·8530·8370·8200·8370·8130·7890·7660·7440·7900·7600·7310·7030·6760·7460·7110·6770·6450·6140·7050·6650·6270·5920·5580·6660·6230·5820·5440·5080·6300·5830·5400·5000·4630·5960·5470·5020·4600·4220·5640·5130·4670·4240·3866789101112131415 0·8960·8870·8790·8700·8610·8040·7880·7730·7580·7430·7220·7010·6810·6610·6420·6500·6250·6010·5770·5550·5850·5570·5300·5050·4810·5270·4970·4690·4420·4170·4750·4440·4150·3880·3620·4290·3970·3680·3400·3150·3880·3560·3260·2990·2750·3500·3190·2900·2630·2391112131415(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%12345 0·9010·8120·7310·6590·5930·8930·7970·7120·6360·5670·8850·7830·6930·6130·5430·8770·7690·6750·5920·5190·8700·7560·6580·5720·4970·8620·7430·6410·5520·4760·8550·7310·6240·5340·4560·8470·7180·6090·5160·4370·8400·7060·5930·4990·4190·8330·6940·5790·4820·40212345678910 0·5350·4820·4340·3910·3520·5070·4520·4040·3610·3220·4800·4250·3760·3330·2950·4560·4000·3510·3080·2700·4320·3760·3270·2840·2470·4100·3540·3050·2630·2270·3900·3330·2850·2430·2080·3700·3140·2660·2250·1910·3520·2960·2490·2090·1760·3350·2790·2330·1940·1626789101112131415 0·3170·2860·2580·2320·2090·2870·2570·2290·2050·1830·2610·2310·2040·1810·1600·2370·2080·1820·1600·1400·2150·1870·1630·1410·1230·1950·1680·1450·1250·1080·1780·1520·1300·1110·0950·1620·1370·1160·0990·0840·1480·1240·1040·0880·0740·1350·1120·0930·0780·0651112131415Annuity Table1 – (1 + r)–nPresent value of an annuity of 1 i.e. ————––rWhere r = discount raten = number of periodsDiscount rate (r)Periods(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%12345 0·9901·9702·9413·9024·8530·9801·9422·8843·8084·7130·9711·9132·8293·7174·5800·9621·8862·7753·6304·4520·9521·8592·7233·5464·3290·9431·8332·6733·4654·2120·9351·8082·6243·3874·1000·9261·7832·5773·3123·9930·9171·7592·5313·2403·8900·9091·7362·4873·1703·79112345678910 5·7956·7287·6528·5669·4715·6016·4727·3258·1628·9835·4176·2307·0207·7868·5305·2426·0026·7337·4358·1115·0765·7866·4637·1087·7224·9175·5826·2106·8027·3604·7675·3895·9716·5157·0244·6235·2065·7476·2476·7104·4865·0335·5355·9956·4184·3554·8685·3355·7596·1456789101112131415 10·368 9·78711·255 10·575 9·95412·134 11·348 10·635 9·98613·004 12·106 11·296 10·563 9·8999·253 8·7609·3858·3068·8639·3947·8878·3848·8539·2957·4997·9438·3588·7459·1087·1397·5367·9048·2448·5596·8057·1617·4877·7868·0616·4956·8147·1037·3677·6061112131415 13·865 12·849 11·938 11·118 10·380 9·712(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%12345 0·9011·7132·4443·1023·6960·8931·6902·4023·0373·6050·8851·6682·3612·9743·5170·8771·6472·3222·9143·4330·8701·6262·2832·8553·3520·8621·6052·2462·7983·2740·8551·5852·2102·7433·1990·8471·5662·1742·6903·1270·8401·5472·1402·6393·0580·8331·5282·1062·5892·99112345678910 4·2314·7125·1465·5375·8894·1114·5644·9685·3285·6503·9984·4234·7995·1325·4263·8894·2884·6394·9465·2163·7844·1604·4874·7725·0193·6854·0394·3444·6074·8333·5893·9224·2074·4514·6593·4983·8124·0784·3034·4943·4103·7063·9544·1634·3393·3263·6053·8374·0314·1926789101112131415 6·2076·4926·7506·9827·1915·9386·1946·4246·6286·8115·6875·9186·1226·3026·4625·4535·6605·8426·0026·1425·2345·4215·5835·7245·8475·0295·1975·3425·4685·5754·8364·9885·1185·2295·3244·6564·7934·9105·0085·0924·4864·6114·7154·8024·8764·3274·4394·5334·6114·6751112131415。
2014年12月ACCA F5考试真题
Performance ManagementMonday 1 December 2014Time allowedReading and planning: 15 minutesWriting: 3 hoursThis paper is divided into two sections:Section A – ALL 20 questions are compulsory and MUST beattemptedSection B – ALL FIVE questions are compulsory and MUST beattemptedFormulae Sheet is on page 14.Do NOT open this paper until instructed by the supervisor.During reading and planning time only the question paper maybe annotated. You must NOT write in your answer booklet until instructed by the supervisor.This question paper must not be removed from the examination hall.The Association of Chartered Certified AccountantsSection A – ALL 20 questions are compulsory and MUST be attemptedPlease use the space provided on the inside cover of the Candidate Answer Booklet to indicate your chosen answer to each multiple choice question.Each question is worth 2 marks.1 Dust Co has two divisions, A and B. Each division is currently considering the following separate projects:Division A $32·6 million $14·4 million30%Division B $22·2 million $8·8 million24%Capital required for the projectSales generated by projectOperating profit marginCost of capital 10% 10%Current return on investment of division 15% 9%If residual income is used as the basis for the investment decision, which Division(s) would choose to invest in the project?A B C D Division A onlyDivision B onlyBoth Division A and Division B Neither Division A nor Division B2 The following costs have arisen in relation to the production of a product:(i) Planning and concept design costs(ii) Testing costs(iii) Production costs(iv) Distribution and customer service costsIn calculating the life cycle costs of a product, which of the above items would be included?A B C D (iii) only(i), (ii) and (iii) only (i), (ii) and (iv) only All of the above3 Which of the following describes a ‘basic standard’ within the context of budgeting?A B C D A standard which is kept unchanged over a period of timeA standard which is based on current price levelsA standard set at an ideal level, which makes no allowance for normal losses, waste and machine downtime A standard which assumes an efficient level of operation, but which includes allowances for factors such as normal loss, waste and machine downtime4 The following statements have been made about planning and control as described in the three tiers of RobertAnthony’s decision-making hierarchy:(1) Strategic planning is concerned with making decisions about the efficient and effective use of existing resources(2) Operational control is about ensuring that specific tasks are carried out efficiently and effectivelyWhich of the above statements is/are true?A B C D 1 only2 onlyNeither 1 nor 2 Both 1 and 25 P Co makes two products – P1 and P2 – budgeted details of which are as follows:P1 $ P2 $Selling price 10·00 8·00 Cost per unit:Direct materials Direct labour Variable overhead Fixed overhead3·501·500·604·001·000·40 1·20 1·00 ––––––––––Profit per unit 3·20 1·60––––––––––Budgeted production and sales for the year ended 30 November 2015 are:Product P1 Product P2 10,000 units 12,500 unitsThe fixed overhead costs included in P1 relate to apportionment of general overhead costs only. However, P2 also includes specific fixed overheads totalling $2,500.If only product P1 were to be made, how many units (to the nearest unit) would need to be sold in order to achieve a profit of $60,000 each year?A B C D 25,625 units 19,205 units 18,636 units 26,406 units6 A company has the following production planned for the next four weeks. The figures reflect the full capacity level ofoperations. Planned output is equal to the maximum demand per product.Product A$ per unit160B$ per unit214C$ per unit100D$ per unit140Selling priceRaw material cost Direct labour cost Variable overhead cost Fixed overhead cost246624568818223324402218 16 10 8 12 ––––––––––––––––Profit 30 42 13 48––––––––––––––––Planned outputDirect labour hours per unit 3006125824034002The direct labour force is threatening to go on strike for two weeks out of the coming four. This means that only 2,160 hours will be available for production rather than the usual 4,320 hours.If the strike goes ahead, which product or products should be produced if profits are to be maximised?A B C D D and A B and D D only B and C7 The following table shows the number of clients who attended a particular accountancy practice over the last fourweeks and the total costs incurred during each of the weeks:Week Number of clients Total cost$1 2 3 4 40044042046036,88039,84036,80040,000Applying the high low method to the above information, which of the following could be used to forecast total cost ($) from the number of clients expected to attend (where x = the expected number of clients)?A B C D 7,280 + 74x 16,080 + 52x 3,200 + 80x 40,000/x8 Oxco has two divisions, A and B. Division A makes a component for air conditioning units which it can only sell toDivision B. It has no other outlet for sales.Current information relating to Division A is as follows:Marginal cost per unit $100Transfer price of the component $165Total production and sales of the component each year Specific fixed costs of Division A per year2,200 units $10,000Cold Co has offered to sell the component to Division B for $140 per unit. If Division B accepts this offer, Division A will be shut.If Division B accepts Cold Co’s offer, what will be the impact on profits per year for the group as a whole?A B C D Increase of $65,000 Decrease of $78,000 Decrease of $88,000 Increase of $55,0009 The following statements have been made in relation to activity-based costing:(1) A cost driver is a factor which causes a change in the cost of an activity(2) Traditional absorption costing tends to under-estimate overhead costs for high volume productsWhich of the above statements is/are true?A B C D 1 only2 onlyNeither 1 nor 2 Both 1 and 210 A linear programming model has been formulated for two products, X and Y. The objective function is depicted by theformula C = 5X + 6Y, where C = contribution, X = the number of product X to be produced and Y = the number of product Y to be produced.Each unit of X uses 2 kg of material Z and each unit of Y uses 3 kg of material Z. The standard cost of material Z is $2 per kg.The shadow price for material Z has been worked out and found to be $2·80 per kg.If an extra 20 kg of material Z becomes available at $2 per kg, what will the maximum increase in contribution be?A B C D Increase of $96 Increase of $56 Increase of $16 No change11 The following statements have been made about both standard costing and total quality management (TQM):(1) They focus on assigning responsibility solely to senior managers(2) They work well in rapidly changing environmentsWhich of the above statements is/are true?A B C D 1 only2 onlyNeither 1 nor 2 Both 1 and 212 The following statements have been made about environmental cost accounting:(1) The majority of environmental costs are already captured within a typical organisation’s accounting system. Thedifficulty lies in identifying them(2) Input/output analysis divides material flows within an organisation into three categories: material flows; systemflows; and delivery and disposal flowsWhich of the above statements is/are true?A B C D 1 only2 onlyNeither 1 nor 2 Both 1 and 213 Def Co provides accounting services to government departments. On average, each staff member works six chargeablehours per day, with the rest of their working day being spent on non-chargeable administrative work. One of thecompany’s main objectives is to produce a high level of quality and customer satisfaction.Def Co has set its targets for the next year as follows:(1) Cutting departmental expenditure by 5%(2) Increasing the number of chargeable hours handled by advisers to 6·2 per day(3) Obtaining a score of 4·7 or above on customer satisfaction surveysWhich of the above targets assesses economy, efficiency and effectiveness at Def Co?Economy Efficiency EffectivenessA B C D 12313122231314 Which of the following is an advantage of non-participative budgeting as compared to participative budgeting?A B C D It increases motivationIt is less time consumingIt increases acceptanceThe budgets produced are more attainable15 The following are all steps in the implementation of the target costing process for a product:(1) Calculate the target cost(2) Calculate the estimated current cost based on the existing product specification(3) Set the required profit(4) Set the selling price(5) Calculate the target cost gapWhich of the following represents the correct sequence if target costing were to be used?A B C D (1), (2), (3), (4), (5)(2), (3), (4), (1), (5) (4), (3), (1), (2), (5) (4), (5), (3), (1), (2)16 What is the name given to a budget which has been prepared by building on a previous period’s budgeted oractual figures?A B C D Incremental budget Flexible budget Zero based budget Functional budget17 Tree Co is considering employing a sales manager. Market research has shown that a good sales manager can increaseprofit by 30%, an average one by 20% and a poor one by 10%. Experience has shown that the company hasattracted a good sales manager 35% of the time, an average one 45% of the time and a poor one 20% of the time.The company’s normal profits are $180,000 per annum and the sales manager’s salary would be $40,000 perannum.Based on the expected value criterion, which of the following represents the correct advice which Tree Co should be given?A B C D Do not employ a sales manager as profits would be expected to fall by $1,300 Employ a sales manager as profits will increase by $38,700Employ a sales manager as profits are expected to increase by $100Do not employ a sales manager as profits are expected to fall by $39,90018 A company manufactures two products, C and D, for which the following information is available:Product C 1,0008135 Product D4,00010153Total5,00048,00028Budgeted production (units)Labour hours per unit/in totalNumber of production runs requiredNumber of inspections during production 8Total production set up costs Total inspection costsOther overhead costs $140,000 $80,000 $96,000Other overhead costs are absorbed on the basis of labour hours per unit.Using activity-based costing, what is the budgeted overhead cost per unit of product D?A B C D $43·84 $46·25 $131·00 $140·6419 X Co uses rolling budgeting, updating its budgets on a quarterly basis. After carrying out the last quarter’s update tothe cash budget, it projected a forecast cash deficit of $400,000 at the end of the year. Consequently, the planned purchase of new capital equipment has been postponed.Which of the following types of control is the sales manager’s actions an example of?A B C D Feedforward control Negative feedback control Positive feedback control Double loop feedback control20 The following circumstances may arise in relation to the launch of a new product:(i) Demand is relatively inelastic(ii) There are significant economies of scale(iii) The firm wishes to discourage new entrants to the market(iv) The product life cycle is particularly shortWhich of the above circumstances favour a penetration pricing policy?A B C D (ii) and (iii) only(ii) and (iv)(i), (ii) and (iii)(ii), (iii) and (iv) only(40 marks)Section B – ALL FIVE questions are compulsory and MUST be attempted1 Chair Co has developed a new type of luxury car seat. The estimated labour time for the first unit is 12 hours but alearning curve of 75% is expected to apply for the first eight units produced. The cost of labour is $15 per hour. The cost of materials and other variable overheads is expected to total $230 per unit.Chair Co plans on pricing the seat by adding a 50% mark-up to the total variable cost per seat, with the labour cost being based on the incremental time taken to produce the 8th unit.Required:(a) Calculate the price which Chair Co expects to charge for the new seat.Note: The learning index for a 75% learning curve is –0·415. (5 marks)(b) The first phase of production has now been completed for the new car seat. The first unit actually took12·5 hours to make and the total time for the first eight units was 34·3 hours, at which point the learning effectcame to an end. Chair Co are planning on adjusting the price to reflect the actual time it took to complete the8th unit.Required:(i) Calculate the actual rate of learning and state whether this means that the labour force actually learntmore quickly or less quickly than expected. (3 marks) (ii) Briefly explain whether the adjusted price charged by Chair Co will be higher or lower than the price you calculated in part (a) above. You are NOT required to calculate the adjusted price. (2 marks)(10 marks)2 Glam Co is a hairdressing salon which provides both ‘cuts’ and ‘treatments’ to clients. All cuts and treatments at thesalon are carried out by one of the salon’s three senior stylists. The salon also has two salon assistants and two junior stylists.Every customer attending the salon is first seen by a salon assistant, who washes their hair; next, by a senior stylist, who cuts or treats the hair depending on which service the customer wants; then finally, a junior stylist who dries their hair. The average length of time spent with each member of staff is as follows:Cut Hours 0·11 Treatment Hours0·31·50·5AssistantSenior stylistJunior stylist 0·5The salon is open for eight hours each day for six days per week. It is only closed for two weeks each year. Staff salaries are $40,000 each year for senior stylists, $28,000 each year for junior stylists and $12,000 each year for the assistants. The cost of cleaning products applied when washing the hair is $0·60 per client. The cost of all additional products applied during a ‘treatment’ is $7·40 per client. Other salon costs (excluding labour and raw materials) amount to $106,400 each year.Glam Co charges $60 for each cut and $110 for each treatment.The senior stylists’ time has been correctly identified as the bottleneck activity.Required:(a) Briefly explain why the senior stylists’ time has been described as the ‘bottleneck activity’, supporting youranswer with calculations. (4 marks) (b) Calculate the throughput accounting ratio (TPAR) for ‘cuts’ and the TPAR for ‘treatments’ assuming thebottleneck activity is fully utilised. (6 marks)(10 marks)3 The Hi Life Co (HL Co) makes sofas. It has recently received a request from a customer to provide a one-off order ofsofas, in excess of normal budgeted production. The order would need to be completed within two weeks. The following cost estimate has already been prepared:Direct materials: FabricWoodNote12$3,400410 200 m2 at $17 per m250 m at $8·20 per m 2Direct labour:SkilledSemi-skilled Factory overheads 200 hours at $16 per hour300 hours at $12 per hour500 hours at $3 per hour3453,2003,6001,500–––––––Total production cost 12,110Administration overheads at 10% of total production cost 6 1,211–––––––Total cost 13,321–––––––Notes1 The fabric is regularly used by HL Co. There are currently 300 m2 in inventory, which cost $17 per m 2. Thecurrent purchase price of the fabric is $17·50 per m 2.2 This type of wood is regularly used by HL Co and usually costs $8·20 per m 2. However, the company’s currentsupplier’s earliest delivery time for the wood is in three weeks’ time. An alternative supplier could deliver immediately but they would charge $8·50 per m 2. HL Co already has 500 m 2 in inventory but 480 m 2 of this is needed to complete other existing orders in the next two weeks. The remaining 20 m2 is not going to be needed until four weeks’ time.3 The skilled labour force is employed under permanent contracts of employment under which they must be paidfor 40 hours’ per week’s labour, even if their time is idle due to absence of orders. Their rate of pay is $16 per hour, although any overtime is paid at time and a half. In the next two weeks, there is spare capacity of 150 labour hours.4 5 There is no spare capacity for semi-skilled workers. They are currently paid $12 per hour or time and a half for overtime. However, a local agency can provide additional semi-skilled workers for $14 per hour.The $3 absorption rate is HL Co’s standard factory overhead absorption rate; $1·50 per hour reflects the cost of the factory supervisor’s salary and the other $1·50 per hour reflects general factory costs. The supervisor is paid an annual salary and is also paid $15 per hour for any overtime he works. He will need to work 20 hours’overtime if this order is accepted.6 This is an apportionment of the general administration overheads incurred by HL Co.Required:Prepare, on a relevant cost basis, the lowest cost estimate which could be used as the basis for the quotation. Explain briefly your reasons for including or excluding each of the costs in your estimate.(10 marks)4 Jamair was founded in September 2007 and is one of a growing number of low-cost airlines in the country of Shania.Jamair’s strategy is to operate as a low-cost, high efficiency airline, and it does this by:––Operating mostly in secondary cities to reduce landing costs.Using only one type of aircraft in order to reduce maintenance and operational costs. These planes are leased rather than bought outright.–––Having only one category of seat class.Having no pre-allocated seats or in-flight entertainment.Focusing on e-commerce with customers both booking tickets and checking in for flights online.The airline was given an ‘on time arrival’ ranking of seventh best by the country’s aviation authority, who rank all 50 of the country’s airlines based on the number of flights which arrive on time at their destinations. 48 Jamair flights were cancelled in 2013 compared to 35 in 2012. This increase was due to an increase in the staff absentee rate at Jamair from 3 days per staff member per year to 4·5 days.The average ‘ground turnaround time’ for airlines in Shania is 50 minutes, meaning that, on average, planes are on the ground for cleaning, refuelling, etc for 50 minutes before departing again. Customer satisfaction surveys have shown that 85% of customers are happy with the standard of cleanliness on Jamair’s planes.The number of passengers carried by the airline has grown from 300,000 passengers on a total of 3,428 flights in 2007 to 920,000 passengers on 7,650 flights in 2013. The overall growth of the airline has been helped by the limited route licensing policy of the Shanian government, which has given Jamair almost monopoly status on some of its routes. However, the government is now set to change this policy with almost immediate effect, and it has become more important than ever to monitor performance effectively.Required:(a) Describe each of the four perspectives of the balanced scorecard. (6 marks)(b) For each perspective of the balanced scorecard, identify one goal together with a corresponding performancemeasure which could be used by Jamair to measure the company’s performance. The goals and measures should be specifically relevant to Jamair. For each pair of goals and measures, explain why you have chosen them. (9 marks)(15 marks)5 The Safe Soap Co makes environmentally-friendly soap using three basic ingredients. The standard cost card for onebatch of soap for the month of September was as follows:Material Lye Coconut oil Shea butter Kilograms0·250·6Price per kilogram ($)1040·5 3The budget for production and sales in September was 120,000 batches. Actual production and sales were 136,000 batches. The actual ingredients used were as follows:Material Lye Coconut oil Shea butter Kilograms 34,080 83,232 64,200Required:(a) Calculate the total material mix variance and the total material yield variance for September. (8 marks)(b) In October the materials mix and yield variances were as follows:Mix: $6,000 adverseYield: $10,000 favourableThe production manager is pleased with the results overall, stating:‘At the beginning of September I made some changes to the mix of ingredients used for the soaps. As I expected, the mix variance is adverse in both months because we haven’t yet updated our standard cost card but, in both months, the favourable yield variance more than makes up for this. Overall, I think we can be satisfied that the changes made to the product mix are producing good results and now we are able to produce more batches and meet the growing demand for our product.’The sales manager, however, holds a different view and says:‘I’m not happy with this change in the ingredients mix. I’ve had to explain to the board why the sales volume variance for October was $22,000 adverse. I’ve tried to explain that the quality of the soap has declined slightly and some of my customers have realised this and simply aren’t happy but no-one seems to be listening. Some customers are even demanding that the price of the soap be reduced and threatening to go elsewhere if the problem isn’t sorted out.’Required:(i) Briefly explain what the adverse materials mix and favourable materials yield variances indicate aboutproduction at Safe Soap Co in October.Note: You are NOT required to discuss revision of standards or operational and planning variances.(4 marks)(ii) Discuss whether the sales manager could be justified in claiming that the change in the materials mix has caused an adverse sales volume variance in October. (3 marks)(15 marks)Formulae SheetLearning curveY = ax bWhere Y = cumulative average time per unit to produce x unitsa = the time taken for the first unit of outputx = the cumulative number of units producedb = the index of learning (log LR/log2)LR = the learning rate as a decimalDemand curveP = a – bQchange in priceb = change in quantitya = price when Q = 0MR = a – 2bQEnd of Question Paper。
2014年12月ACCAF9考试真题答案
An swersDecember 2014 AnswersFundamentals Level - Skills Module, Paper F9 Financial ManagementSection AMonetary value of return = $3 10 x 1 197 = $3 71Current share price = $371 -$0 21 = $3 50AThe hedge needs to create a peso liability to match the 500,000 peso future income. 6-month peso borrowing rate = 8/2 = 4% 6-month dollar deposit rate = 3/2 = 1 5% Dollar value of money market hedge = 500,000 x 1015/(1 - 04 x 15) = $32,532 or $32,500CTotal cash flowJoint probabilityEV of cash flow($)($) 36,0000 1125 4,05014,000 0 0375 525 32,000 0 4500 14,400 10,000 0 1500 1,500 16,000 0 1875 3,000 (6,000)0 0625(375)23,100Less initial investment (12,000)EV of the NPV11,100BAMV = (7 x 5 033) + (105 x 0547) = $92 6712 345 67 8910 1112Gearing = [(4,000 x 1 05) + 6,200 + (2,000 x 0 8)]/(8,000 x 2 x 5) = 12,000/80,000 = 15%13 BInventory = 15,000,000 x 60/360 = $2,500,000Trade receivables = 27,000,000 x 50/360 = $3,750,000 Trade payables = 15,000,000 x 45/360 = $1,875,000 Net investment required = 2,500,000 + 3,750,000 -1,875,000 = $4,375,00014 C15 D16 C1718 B 19DDividend growth rate = 100 x ((33 6/32) - -1) = 5%MV = 33 -6/(0 13 -0 05) = $4 2020 DSection B 1(a) Cash balances at the end of each month:December January February March April Sales (units)1,200 1,250 1,300 1,400 1,500Selling price ($/unit) 800 800 840 840Sales ($000) 960 1,000 1,092 1,176Month receivedJanuary February March AprilDecember January February MarchProduction (units) 1,250 1,300 1,400 1,500 Raw materials (units) 2,500 2,600 2,800 3,000Raw materials ($000) 500 520 560 600 Month payableJanuary February March AprilDecember January February MarchProduction (units) 1,250 1,300 1,400 1,500 Variable costs ($000)125 130 140 150 Month payableDecemberJanuaryFebruary MarchMonthly cash balances:January $000February $000 March $000 Receivables 9601,0001,092 Loan300 Income: 960 1,000 1,392 Raw materials 500 520 560 Variable costs 130140150 Machine400 Expenditure: 630 660 1,110 Opening balance 40370 710 Net cash flow330340 282 Closing balance370710992(b) Calculation of current ratioInventory at the end of the three-month period:This will be the finished goods for April sales of 1,500 units, which can be assumed to be valued at the cost of production of $400 per unit for materials and $100 per unit for variable overheads and wages. The value of the inventory is therefore 1,500 x 500 = $750,000.Trade receivables at the end of the three-month period:These will be March sales of 1,400 x 800 x 1 05 = $1,176,000.Cash balance at the end of the three-month period:This was forecast to be $992,000.Trade payables at the end of the three-month period:This will be the cash owed for March raw materials of $600,000.Forecast current ratioAssuming that current liabilities consists of trade payables alone:Current ratio = (750,000 + 1,176,000 + 992,000)/600,000 = 4 9 times •(c) If Flit Co generates a short-term cash surplus, the cash may be needed again in the near future. In order to increase profitability, theshort-term cash surplus could be invested, for example, in a bank deposit, however, the investment selected would normally not be expected to carry any risk of capital loss. Shares traded on a large stock market carry a significant risk of capital loss, and hence are rarely suitable for investing short-term cash surpluses.(a)2 Average historical share price growth = 100 x ((10 90/9 15) 1/3 -1) = 6% per yearFuture share price after 7 years = 10 90 x 1 067 = $16 39 per shareConversion value of each loan note = 16 39 x 8 = $131 12The investor is faced with the choice of redeeming the loan notes at their nominal value of $100 or converting them into shares worth $131 12. The rational choice is to maximise wealth by taking the conversion option.Market value of each loan note = (8 x 5 033) + (131 12 x 0 547) = 40 26 + 71 72 = $111 98(b) The average price/earnings ratio (P/E ratio) of listed companies similar to Par Co has been recently reported to be 12 timesand the most recent earnings per share (EPS) of Par Co is 62 cents per share. The share price calculated using the P/E ratio method is therefore $7 44 (12 x 62/100).One problem with using the P/E ratio valuation method relates to the selection of a suitable P/E ratio. The P/E ratio used here is an average P/E ratio of similar companies and Par Co is clearly not an average company, as evidenced by its year-end share price being $10 90 per share, some 47% more than the calculated value of $7 44. The business risk and financial risk of Par Co will not be exactly the same as the business risk and financial risk of the similar companies, for example, because ofdiversification of business operations and differing capital structures. Par Co may be a market leader or a rising star compared to similar companies.The P/E ratio method is more suited to valuing the shares of unlisted companies, rather than listed companies such as Par Co. If the stock exchange on which its shares are traded is efficient, which is likely as it is a large stock exchange, the share price of Par Co will be a fair reflection of its value and its prospects. As a listed company, Par Co would in fact contribute to the average P/E ratio for its business sector, used in valuing similar unlisted companies.3 (a)(b)(c) Looking at the P/E ratio of Par Co, it can be seen that this is not constant, but has increased each year for four years, from14 • times in 2011 to 17 6 times in 2014. This raises questions about using a P/E ratio based on historical information asa way of valuing future activity.Ideally, the P/E ratio method should use forecast maintainable earnings, but the calculated value of $7 44 has used the historical EPS of 2014. As this was the lowest EPS over the four years, forecasting future maintainable earnings may be a problem here.WorkingsYear 2011 2012 2013 2014Earnings per share (cents) 64 68 70 62Year-end share price ($) 9 15 9 88 10 49 10 90P/E ratio (times) 14 3 14 5 15 0 17 6Value of Par Co ($m) 274 5 296 4 314 7 327 0(Note: It is assumed that the number of ordinary shares has remained constant)The current dollar value of the future euro receipt = ? 1,200,000/4 2080 = $285,171If a forward contract is taken out, PZK Co can lock into the six-month forward exchange rate of 4 2606 euros per dollarFuture dollar value using the forward contract = ?1,200,000/4 2606 = $281,651Loss using the forward contract = 285,171 -281,651 = $3,520If PZK Co chooses not to hedge the future euro receipt, it will be able to exchange the euros for dollars at the future spot exchange rate prevailing when the payment is made. This future spot exchange rate may give a better or worse dollar value than using the six-month forward exchange rate. At the current time, PZK Co may prefer the certainty offered by the forward exchange contract to the uncertainty of leaving the future euro receipt unhedged. In addition, the forward exchange rate is an unbiased estimator of the future spot exchange rate.The implied interest rate in the foreign country can be calculated using interest rate parity.From the formulae sheet, F 0 = S 0 x (1 + i c)/(1 + i b)Hence 4 3132 = 4 2080 x (1 + i c)/1 04Rearranging, (1 + i c) = 4 3132 x 1 04/4 2080 = 1 066The implied annual interest rate in the foreign country is 6 6%. -One of the simplest ways for PZK Co to avoiding exchange rate risk is to invoice in its home currency, which passes the exchange rate risk on to the foreign customer, who must effectively find the dollars with which to make the payment.This strategy may not be commercially viable, however, since the company ' s foreign customers will not want to take on exchange rate risk. They will instead transfer their business to those competitors of PZK Co who invoice in the foreign currency and who therefore shoulder the exchange rate risk.If PZK Co is concerned about exchange rate risk, it will need to consider other hedging methods. For example, if the company regularly receives receipts and makes payments in euros, it could open a bank account denominated in euros.4(a)(b) of Revised draft evaluation of investment proposal1 2 3 4 5$000$000 $000 $000 $000Sales revenue 2,4752,714 4,413 4,775 Variable costs (1,097) (1,323) (2,084) (2,370) Fixed costs(155) (159) (164) (169)Cash flow before tax 1,223 1,232 2,165 2,236TA depreciation (450) (338) (253) (759)Taxable profit 773 894 1,912 1,477Taxation(170) (197) (421) (325) After-tax profit 773 724 1,715 1,056 (325) TA depreciation 450 338 253 759 After-tax cash flow 1,223 1,062 1,968 1,815 (325) Discount at 12% 0 893 0 -797 0 -712 0 636 0 567 Present values 1,0928461,4011,154(184)$000 Present value of cash inflows 4,309 Cost of machine (1,800) NPV2,509The revised draft evaluation of the investment proposal indicates that a positive net present value is expected to be produced. The investment project is therefore financially acceptable and accepting it will increase the wealth of the shareholders of Uftin Co. Workings Year12 3 4 Sales (units/year) 95,000100,000150,000150,000Selling price ($/unit) 25 25 26 27Inflated by 4 2%-($/unit) 26 05 27 14 29 -42 31 83 Sales revenue ($000/year) 2,475 2,714 4,413 4,775 Year12 3 4 Sales (units/year) 95,000100,000150,000150,000Variable costs ($/unit) 11 12 12 13 Inflated by 5% ($/unit) 11 55 13 23 13 -89 15 80 Variable costs ($000/year) 1,0971,3232,0842,370Year1 2 3 4 Fixed costs ($000/year) 150 150 150 150 Inflated by 3% ($000/year) 155 159 164 169 Year1 2 3 4 Tax allowable depreciation ($/year) 450,000 337,500 253,125 759,375 Tax benefits at 22% ($/year) 99,00074,250 55,688 167,063Alternative calculation of after-tax cash flow1 $0002 $0003 $0004 $0005 $000Sales revenue 2,475 2,714 4,413 4,775 Variable costs (1,097) (1,323) (2,084) (2,370)Fixed costs (155) (159) (164) (169)Cash flow before tax 1,2231,232 2,165 2,236Tax liability(269) (271) (476) (492)TAD tax benefits99 74 56 167 After-tax cash flow 1,2231,0621,9681,816(325)The following revisions to the original draft evaluation could be discussed.Inflation Only one year ' s inflation had been applied to sales revenue, variable costs and fixed costs in years 2, 3 and 4. The effect inflation on cash flows is a cumulative one and in this case specific inflation was applied to each kind of cash flow.Interest paymentsThese should not have been included in the draft evaluation because the financing effect is included in the discount rate. In a large company such as Uftin Co, the loan used as part of the financing of the investment is very small in comparison to existing finance and will not affect the weighted average cost of capital.Tax allowable depreciationA constant tax allowable depreciation allowance, equal to 25% of the initial investment, had been used in each year. However, the method which should have been used was 25% per year on a reducing balance basis, resulting in smaller allowances in years 2 and3, and a balancing allowance in year 4. In addition, although tax allowable depreciation had been deducted in order to producetaxable profit, tax allowable depreciation had not been added back in order to produce after-tax cash flow.Year 5 tax liabilityThis had been omitted in the draft evaluation, perhaps because a four-year period was being used as the basis for the evaluation.However, this year 5 cash flow needed to be included as it is a relevant cash flow, arising as a result of the decision to invest.Examiner ' s NoteExplanation of only TWO revisions was required.5 (a) Cost of equityUsing the capital asset pricing model, K e = 4 + (1 15x 6) = 10 9%Cost of debt of loan notesAfter-tax annual interest payment = 6 x 0 75 = $4 -50 per loan note.Year $ 5% discount PV 4% discount PV($) ($)0 (103 50) 1 000 (103 50) 1 000 (103 50)1 -6 4 50 5 076 22 84 5 242 23 596 106 -00 0 746 79 08 0 790 83 74(1 58) 3 83K d = 4 + [(1 x 3 83)/(3 83 + 1 58)] = 4 + 0 7 = 4 7% per yearMarket values of equity and debtNumber of ordinary shares = 200m/0 5 = 400 million sharesMarket value of ordinary shares = 400m x 5 85 = $2,340 millionMarket value of loan notes = 200m x 103 5/100 •= $207 millionTotal market value = 2,340 + 207 = $2,547 millionMarket value WACCK0 = ((10 9 x 2,340) + (4 7 x 207))/2,547 = 26,479/2,547 = 10 4% -Book value WACCK0 = ((10 9 x 850) + (4 7 x 200))/1,050 = 10,205/1,050 = 9 7% -CommentMarket values of financial securities reflect current market conditions and current required rates of return. Market values shouldtherefore always be used in calculating the weighted average cost of capital (WACC) when they are available. If book values are used, the WACC is likely to be understated, since the nominal values of ordinary shares are much less than their market values. Thecontribution of the cost of equity is reduced if book values are used, leading to a lower WACC, as evidenced by the book value WACC(9 7%) and the market value WACC (10 4%) of Tinep Co.(b) A rights issue raises equity finance by offering new shares to existing shareholders in proportion to the number of shares they currentlyhold. Existing shareholders have the right to be offered new shares (the pre-emptive right) before they are offered to new investors, hence the term ‘ rights issue ' . There are a number of factors which Tinep Co should consider.Issue priceRights issues shares are offered at a discount to the market value. It can be difficult to judge what the amount of the discount should be.Relative costRights issues are cheaper than other methods of raising finance by issuing new equity, such as an initial public offer (IPO) or aplacing, due to the lower transactions costs associated with rights issues.Ownership and controlAs the new shares are being offered to existing shareholders, there is no dilution of ownership and control, providing shareholders take up their rights.Gearing and financial riskIncreasing the weighting of equity finance in the capital structure of Tinep Co can decrease its gearing and its financial risk. Theshareholders of the company may see this as a positive move, depending on their individual risk preference positions.Fundamentals Level - Skills Module, Paper F9Financial Management December 2014 Marking SchemeMarks MarksSection A1 -20 Two marks per questionSection B401 (a) Monthly receivablesLoanRaw materials1 0 •11 0 51(b) Closing finished goods inventoryClosing trade receivablesClosing trade payablesCurrent ratio(c)Temporary nature of short-term cash surplusInvestment should have no risk of capital lossShares are not suitable for investment 0 50 50 50 53102 (a) Average historical share price growth rate Future share priceConversion valueComment on conversion and redemption Market value of loan note 1 1 1 1 1(b)5 Share price calculation using P/E ratio method 1Discussion of problems in using P/E ratio method 410(a)3 Current dollar value of euro receipt 1Forward contract value of euro receipt 0 5Loss using forward contract 0 5Explanation of preference for hedging 24(b) Calculation of implied interest rate 2(c) Recognition of risk transfer 1Commercial considerations 2Other relevant discussion 14Marks Marks4 (a) Sales revenue 1Inflated sales revenue 1Inflated variable costs 1Inflated fixed costs 1Excluding interest payments 1Tax allowable depreciation 1Balancing allowance 1Tax liabilities 1Timing of taxation liabilities 1Net present value 1Comment on financial acceptability 111(b) Explanation of first revision 1 -3Explanation of second revision 1 -3Maximum 415(a)5 Cost of equity 1After-tax interest payment 1Setting up IRR calculation 1After-tax cost of debt of loan notes 1Market values 1Market value WACC 1Book value WACC 1Comment on difference 29(b) Issue price 1 —Relative cost 1 —Ownership and control 1 —Gearing and financial risk 1 —Maximum 615。
2014年12月ACCA考试F4(Corporate and business law)样卷
2014年12月ACCA考试F4（Corporate and business law）样卷本文由高顿ACCA整理发布，转载请注明出处ACCA考试F4 Corporate and business law （公司法和商法）在2014年12月份的考试开始，会有一个很大的考试形式的变革，相信学员们已经有所了解了。
为了让大家高效复习，高顿网校小编为大家分享ACCA官方网站刊登的部分样题。
F4从10道简答题变为了45道选择题和5道简答题，时间也缩短了1个小时的时间，这就需要有想报名参加12月份考试的同学提前准备。
In the context of the English legal system, which of the following courts ONLY has civil jurisdiction?A Magistrates' courtB County courtC High Court (1 mark)在考试中，前面几道选择题会相对来说比较基础，考核学员们的是框架性的知识，比如上面这道题就闻到了在英国司法体系中，只有民事管辖权的法庭是哪一下。
这里要注意的一共有两点，第一点就是民事管辖权，第二点就是题目中提到的”ONLY”这个词。
这里也算是一考官为学员们做了一个提示，说明在选项中，可能会涉及到某个法庭不仅有民事管辖权还会有刑事管辖权。
第一项治安法庭，基本没有司法能力，但是是在刑事体系中存在的；第二项地方法院是正确的选择；最后一项是高等法院，它不仅有民事管辖权还有刑事管辖权，所以不符合题目的要求。
这样简单的题目学员们一定要注意，比起之前的简答题来说，这样的题目考察的范围更为狭窄，要求的指示精度更为准确，所以，一定要引起注意。
Ho subscribed for some partly paid-up shares in Io Ltd. The company has not been successful and Ho has been told that when Io Ltd is liquidated, he will have to pay the amount remaining unpaid on his shares. However, he is not sure to whom such payment should be made.In limited liability companies, shareholders are liable to which party for any unpaid capital?A CreditorsB The directorsC The companyD The liquidator (2 marks)本题就相对于来说会复杂一些，因为会搭上一些背景，是题目更为贴近现实。
2014年6月ACCA真题：F4考题（全球）答案十七
2014年6月ACCA真题：F4考题（全球）答案十七8 Anticipatory breach occurs where，prior to the date on which performance is due， it becomes apparent that one of the parties will not perform a substantial part of their obligations under the contract or will commit a fundamental breach of contract. The Convention distinguishes between those cases in which the other party may suspend his own performance of the contract but the contract remains in existence awaiting future events and those cases in which he may declare the contract avoided.Thus as regards the first situation Article 71 provides that a party may suspend performance of his obligations if， after the conclusion of the contract but before it is due to be performed，it becomes apparent that the other party will not perform a substantial part of his obligations as a result of：（a） a serious deficiency in his ability to perform or in his creditworthiness； or（b） his conduct in preparing to perform or in performing the contract.If the circumstances only become apparent after the seller has despatched the goods they may prevent them from being handed over to the buyer， even if the buyer holds a document，such as a Bill of Lading， which entitles the buyer to collect the goods. The party suspending the performance of the contract must immediately give notice of the suspension to the other party and must if that part gives adequate assurance of their future performance then the contract must continue. （Article 71）Alternatively，under Article 72，if prior to the date for performance of the contract it is clear that one of the parties willcommit a fundamental breach of contract， the other party may declare the contract avoided. For a breach of contract to be fundamental， it must result in such detriment to the other party as substantially to deprive him of what they were entitled to expect under the contract，unless the result was neither foreseen by the party in breach nor foreseeable by a reasonable person of the same kind in the same circumstances.If time allows，the party intending to avoid the contract must give reasonable notice to the other party in order to permit him to provide adequate assurance of his performance. However，that requirement does not apply where the other party has expressly stated that that they will not perform their obligations under the contract.Under the facts of the problem scenario it is apparent that Bo has performed an anticipatory breach of his contract with Arti. Arti can suspend performance of the contract and see if Bo changes his mind. Even if he does change his mind， Bo will not be able to claim the acid in spite of holding the Bill of Lading. However，as a result of Bo‘s express repudiation of the contract Arti is entitled to avoid the contract immediately if he chooses and sue Bo for damages.。
ACCA f7 2014 06 官方试卷
P a p e r F 7 ( I N T )ALL FIVE questions are compulsory and MUST be attempted1On 1 October 2013, Penketh acquired 90 million of Sphere’s 150 million $1 equity shares. The acquisition was achieved through a share exchange of one share in Penketh for every three shares in Sphere. At that date the stock market prices of Penketh’s and Sphere’s shares were $4 and $2·50 per share respectively. Additionally, Penketh will pay $1·54 cash on 30 September 2014 for each share acquired. Penketh’s finance cost is 10% per annum.The retained earnings of Sphere brought forward at 1 April 2013 were $120 million.The summarised statements of profit or loss and other comprehensive income for the companies for the year ended31 March 2014 are:Penketh Sphere$’000 $’000 Revenue620,000310,000Cost of sales(400,000)(150,000)––––––––––––––––Gross profit220,000160,000Distribution costs(40,000)(20,000)Administrative expenses(36,000)(25,000)Investment income (note (iii))5,0001,600Finance costs (2,000)(5,600)––––––––––––––––Profit before tax147,000111,000Income tax expense(45,000)(31,000)––––––––––––––––Profit for the year102,00080,000Other comprehensive incomeGain/(loss) on revaluation of land (notes (i) and (ii))(2,200)3,000––––––––––––––––T otal comprehensive income for the year99,80083,000––––––––––––––––The following information is relevant:(i) A fair value exercise conducted on 1 October 2013 concluded that the carrying amounts of Sphere’s net assetswere equal to their fair values with the following exceptions:–the fair value of Sphere’s land was $2 million in excess of its carrying amount–an item of plant had a fair value of $6 million in excess of its carrying amount. The plant had a remaining life of two years at the date of acquisition. Plant depreciation is charged to cost of sales.–Penketh placed a value of $5 million on Sphere’s good trading relationships with its customers. Penketh expected, on average, a customer relationship to last for a further five years. Amortisation of intangible assetsis charged to administrative expenses.(ii)Penketh’s group policy is to revalue land to market value at the end of each accounting period. Prior to its acquisition, Sphere’s land had been valued at historical cost, but it has adopted the group policy since its acquisition. In addition to the fair value increase in Sphere’s land of $2 million (see note (i)), it had increased bya further $1 million since the acquisition.(iii)On 1 October 2013, Penketh also acquired 30% of Ventor’s equity shares. Ventor’s profit after tax for the year ended 31 March 2014 was $10 million and during March 2014 Ventor paid a dividend of $6 million. Penketh uses equity accounting in its consolidated financial statements for its investment in Ventor.Sphere did not pay any dividends in the year ended 31 March 2014.(iv)After the acquisition Penketh sold goods to Sphere for $20 million. Sphere had one fifth of these goods still in inventory at 31 March 2014. In March 2014 Penketh sold goods to Ventor for $15 million, all of which were still in inventory at 31 March 2014. All sales to Sphere and Ventor had a mark-up on cost of 25%.(v)Penketh’s policy is to value the non-controlling interest at the date of acquisition at its fair value. For this purpose, the share price of Sphere at that date (1 October 2013) is representative of the fair value of the shares held by the non-controlling interest.(vi)All items in the above statements of profit or loss and other comprehensive income are deemed to accrue evenly over the year unless otherwise indicated.Required:(a)Calculate the consolidated goodwill as at 1 October 2013.(b)Prepare the consolidated statement of profit or loss and other comprehensive income of Penketh for the yearended 31 March 2014.The following mark allocation is provided as guidance for this question:(a) 6 marks(b)19 marks(25 marks)2The following trial balance relates to Xtol at 31 March 2014:$’000$’000 Revenue (note (i))490,000Cost of sales 290,600Distribution costs 33,500Administrative expenses 36,800Loan note interest and dividends paid (notes (iv) and (v))13,380Bank interest90020-year leased property at cost (note (ii)) 100,000Plant and equipment at cost (note (ii))155,500Accumulated amortisation/depreciation at 1 April 2013:leased property25,000plant and equipment43,500 Inventory at 31 March 2014 61,000T rade receivables 63,000T rade payables32,200Bank5,500Equity shares of 25 cents each (note (iii))56,000Share premium25,000Retained earnings at 1 April 201326,0805% convertible loan note (note (iv))50,000Current tax (note (vi))3,200Deferred tax (note (vi))4,600––––––––––––––––757,880757,880––––––––––––––––The following notes are relevant:(i)Revenue includes an amount of $20 million for cash sales made through Xtol’s retail outlets during the year onbehalf of Francais. Xtol, acting as agent, is entitled to a commission of 10% of the selling price of these goods.By 31 March 2014, Xtol had remitted to Francais $15 million (of the $20 million sales) and recorded this amount in cost of sales.(ii)Plant and equipment is depreciated at 12½% per annum on the reducing balance basis.All amortisation/depreciation of non-current assets is charged to cost of sales.(iii)On 1 August 2013, Xtol made a fully subscribed rights issue of equity share capital based on two new shares at60 cents each for every five shares held. The market price of Xtol’s shares before the issue was $1·02 each. Theissue has been fully recorded in the trial balance figures.(iv)On 1 April 2013, Xtol issued a 5% $50 million convertible loan note at par. Interest is payable annually in arrears on 31 March each year. The loan note is redeemable at par or convertible into equity shares at the option of the loan note holders on 31 March 2016. The interest on an equivalent loan note without the conversion rights would be 8% per annum.The present values of $1 receivable at the end of each year, based on discount rates of 5% and 8%, are:5%8%End of year10·950·9320·910·8630·860·79(v)An equity dividend of 4 cents per share was paid on 30 May 2013 and, after the rights issue, a further dividend of 2 cents per share was paid on 30 November 2013.(vi)The balance on current tax represents the under/over provision of the tax liability for the year ended 31 March 2013. A provision of $28 million is required for current tax for the year ended 31 March 2014 and at this date the deferred tax liability was assessed at $8·3 million.Required:(a)Prepare the statement of profit or loss for Xtol for the year ended 31 March 2014.(b)Prepare the statement of changes in equity for Xtol for the year ended 31 March 2014.(c)Prepare the statement of financial position for Xtol as at 31 March 2014.(d)Calculate the basic earnings per share (EPS) for Xtol for the year ended 31 March 2014.Note: Answers and workings (for parts (a) to (c)) should be presented to the nearest $1,000; notes to the financial statements are not required.The following mark allocation is provided as guidance for this question:(a)8 marks(b) 6 marks(c)8 marks(d) 3 marks(25 marks)3Shown below are the financial statements of Woodbank for its most recent two years:Statements of profit or loss for the year ended 31 March:20142013$’000$’000 Revenue 150,000110,000Cost of sales(117,000)(85,800)––––––––––––––––Gross profit33,00024,200Distribution costs(6,000)(5,000)Administrative expenses(9,000)(9,200)Finance costs –loan note interest(1,750)(500)––––––––––––––––Profit before tax16,2509,500Income tax expense (5,750)(3,000)––––––––––––––––Profit for the year 10,5006,500––––––––––––––––Statements of financial position as at 31 March:20142013$’000$’000 AssetsNon-current assetsProperty, plant and equipment 118,00085,000Goodwill30,000nil––––––––––––––––148,00085,000––––––––––––––––Current assetsInventory 15,50012,000T rade receivables11,0008,000Bank5005,000––––––––––––––––27,00025,000––––––––––––––––T otal assets175,000110,000––––––––––––––––Equity and liabilitiesEquityEquity shares of $1 each 80,00080,000Retained earnings 15,00010,000––––––––––––––––95,00090,000––––––––––––––––Non-current liabilities10% loan notes55,0005,000––––––––––––––––Current liabilitiesT rade payables21,00013,000Current tax payable4,0002,000––––––––––––––––25,00015,000––––––––––––––––T otal equity and liabilities175,000110,000––––––––––––––––The following information is available:(i)On 1 January 2014, Woodbank purchased the trading assets and operations of Shaw for $50 million and, onthe same date, issued additional 10% loan notes to finance the purchase. Shaw was an unincorporated entity and its results (for three months from 1 January 2014 to 31 March 2014) and net assets (including goodwill not subject to any impairment) are included in Woodbank’s financial statements for the year ended 31 March 2014 .There were no other purchases or sales of non-current assets during the year ended 31 March 2014.(ii)Extracts of the results (for three months) of the previously separate business of Shaw, which are included in Woodbank’s statement of profit or loss for the year ended 31 March 2014, are:$’000 Revenue 30,000Cost of sales(21,000)–––––––Gross profit9,000Distribution costs(2,000)Administrative expenses(2,000)(iii)The following six ratios have been correctly calculated for Woodbank for the year ended 31 March 2013: Return on capital employed (ROCE) 10·5%(profit before interest and tax/year-end total assets less current liabilities)Net asset (equal to capital employed) turnover 1·16 timesGross profit margin22·0%Profit before interest and tax margin9·1%Current ratio 1·7:1Gearing (debt/(debt + equity))5·3%Required:(a)Calculate for the year ended 31 March 2014:(i)equivalent ratios (all six) to the above for Woodbank based on its reported figures; and(ii)equivalent ratios to the first FOUR only for Woodbank excluding the effects of the purchase of Shaw.Note: Assume the capital employed for Shaw is equal to its purchase price of $50 million.(10 marks) (b)Assess the comparative financial performance and position of Woodbank for the year ended 31 March 2014.Your answer should refer to the effects of the purchase of Shaw.(15 marks)(25 marks)4(a) A director of Enca, a public listed company, has expressed concerns about the accounting treatment of some of the company’s items of property, plant and equipment which have increased in value. His main concern is that the statement of financial position does not show the true value of assets which have increased in value and that this ‘undervaluation’ is compounded by having to charge depreciation on these assets, which also reduces reported profit. He argues that this does not make economic sense.Required:Respond to the director’s concerns by summarising the principal requirements of IAS 16 Property, Plant and Equipment in relation to the revaluation of property, plant and equipment, including its subsequent treatment.(5 marks)(b)The following details relate to two items of property, plant and equipment (A and B) owned by Delta which aredepreciated on a straight-line basis with no estimated residual value:Item A Item BEstimated useful life at acquisition8 years 6 years$’000$’000Cost on 1 April 2010240,000120,000Accumulated depreciation (two years)(60,000)(40,000)––––––––––––––––Carrying amount at 31 March 2012180,00080,000––––––––––––––––Revaluation on 1 April 2012:Revalued amount160,000112,000Revised estimated remaining useful life 5 years 5 years Subsequent expenditure capitalised on 1 April 2013nil14,400At 31 March 2014 item A was still in use, but item B was sold (on that date) for $70 million.Note:Delta makes an annual transfer from its revaluation surplus to retained earnings in respect of excess depreciation.Required:Prepare extracts from:(i)Delta’s statements of profit or loss for the years ended 31 March 2013 and 2014 in respect of charges(expenses) related to property, plant and equipment;(ii)Delta’s statements of financial position as at 31 March 2013 and 2014 for the carrying amount of property, plant and equipment and the revaluation surplus.The following mark allocation is provided as guidance for this requirement:(i) 5 marks(ii) 5 marks(10 marks)(15 marks)5The following issues have arisen during the preparation of Skeptic’s draft financial statements for the year ended31 March 2014:(i)From 1 April 2013, the directors have decided to reclassify research and amortised development costs asadministrative expenses rather than its previous classification as cost of sales. They believe that the previous treatment unfairly distorted the company’s gross profit margin.(ii)Skeptic has two potential liabilities to assess. The first is an outstanding court case concerning a customer claiming damages for losses due to faulty components supplied by Skeptic. The second is the provision required for product warranty claims against 200,000 units of retail goods supplied with a one-year warranty.The estimated outcomes of the two liabilities are:Court case Product warranty claims10% chance of no damages awarded70% of sales will have no claim65% chance of damages of $4 million 20% of sales will require a $25 repair25% chance of damages of $6 million 10% of sales will require a $120 repair (iii)On 1 April 2013, Skeptic received a government grant of $8 million towards the purchase of new plant with a gross cost of $64 million. The plant has an estimated life of 10 years and is depreciated on a straight-line basis.One of the terms of the grant is that the sale of the plant before 31 March 2017 would trigger a repayment ona sliding scale as follows:Sale in the year ended:Amount of repayment31 March 2014100%31 March 201575%31 March 201650%31 March 201725%Accordingly, the directors propose to credit to the statement of profit or loss $2 million ($8 million x 25%) being the amount of the grant they believe has been earned in the year to 31 March 2014. Skeptic accounts for government grants as a separate item of deferred credit in its statement of financial position. Skeptic has no intention of selling the plant before the end of its economic life.Required:Advise, and quantify where possible, how the above items (i) to (iii) should be treated in Skeptic’s financial statements for the year ended 31 March 2014.The following mark allocation is provided as guidance for this question:(i) 3 marks(ii) 4 marks(iii) 3 marks(10 marks)End of Question Paper。
国际注册会计师ACCA试卷
Year Sales volume (units) Selling price ($/unit) Variable cost ($/unit) Fixed costs ($000)
1 12,000
450 260 750
2 13,000
475 280 750
3 10,000
500 295 750
4 10,000
(5 marks)
(c) Discuss the reasons why the Board of OAP Co may have decided to limit investment funds for the next year. (6 marks)
(25 marks)
2
2 The current assets and current liabilities of CSZ Co at the end of March 2014 are as follows:
(8 marks)
(d) Briefly discuss THREE internal methods which could be used by CSZ Co to manage foreign currency
transaction risk arising from its continuing business activities.
60 days 75 days 55 days 1·4 times
Required:
(a) Calculate the working capital cycle (cash collection cycle) of CSZ Co at the end of March 2014 and discuss
2014年12月ACCA P5真题
Advanced Performance ManagementThursday 4 December 2014Time allowedReading and planning: 15 minutesWriting: 3 hoursThis paper is divided into two sections:Section A – This ONE question is compulsory and MUST be attempted Section B – TWO questions ONLY to be attemptedPresent Value and Annuity Tables are on pages 11 and 12.Do NOT open this paper until instructed by the supervisor.During reading and planning time only the question paper maybe annotated. You must NOT write in your answer booklet until instructed by the supervisor.This question paper must not be removed from the examination hall.The Association of Chartered Certified AccountantsThis is a blank page.The question paper begins on page 3.Section A – This ONE question is compulsory and MUST be attempted1 Boltzman Machines (Boltzman) is a listed, multinational engineering business. It has two divisions, onemanufacturing aerospace parts and the other automotive parts. The company is known for innovation and it allows its managers much autonomy to run their own divisions and projects. There has been recent criticism at a shareholders’ meeting of the executive management for not listening to shareholders’ concerns and allowing this autonomy to run out of control. Therefore, the board at Boltzman have decided to create a framework which brings together all of the initiatives described below.The chief executive officer (CEO) feels that the performance prism may be a suitable model and has asked you to drafta report to the board to explain the model and how Boltzman’s existing initiatives fit within it.The initiatives which are running at present are:1.2. An analysis of stakeholder influence at Boltzman leading to suitable strategic performance measures.A benchmarking exercise of the performance measures from initiative 1 with Boltzman’s main competitor, General Machines.3. The introduction of quality initiatives bringing lean production methods to Boltzman.The CEO also requires your input on each of these initiatives as they are all at various stages of progress:First, a stakeholder analysis has been completed by one of Boltzman’s managers (in Appendix 1) but she has gon e on holiday and has not written up a commentary of her results. Therefore, the CEO wants you to take the information in Appendix 1 and explain the results and evaluate the suggested performance measures. The CEO has asked that you do not, at this stage, suggest long lists of additional indicators.Second, the CEO wants you to use these suggested measures to benchmark the performance of Boltzman against General Machines. The CEO stated, ‘Make sure that you calculate the measures given in Appendix 1. You should also add two justified measures of your own using the data provided. However, restrict yourself to these seven measures and don’t drown us with detail about individual business units.’ A junior analyst has gathered data to use in the benchmarking exercise in Appendix 2.Third, the company has stated that one of its strategic aims is to be the highest quality supplier in the market place.In order to achieve this, the head of the aerospace division has already started a project to implement just-in-time (JIT) manufacturing. An extract of his email proposing this change is given in Appendix 3. The CEO feels that there are some important elements hinted at but not developed in this email. In particular, the CEO wants you to explainthe problems of moving to JIT manufacturing.Required:Prepare a report to the board of Boltzman to:(i) Explain the facets of the performance prism and discuss how the three initiatives relate to the facets.(9 marks)(ii) Briefly justify appropriate management approaches to each of the stakeholders and, based on this analysis, evaluate the appropriateness of the performance measures suggested in Appendix 1. (14 marks)(iii) Benchmark Boltzman against General Machines as suggested by the CEO, evaluating the approach to benchmarking used. (16 marks)(iv) Explain the problems which will accompany a move towards just-in-time manufacturing at Boltzman.(7 marks) Professional marks will be awarded for the format, style and structure of the discussion of your answer.(4 marks)(50 marks)Appendix 1Key stakeholders Shareholders Level of interest Level of powerLow – institutions have delegatedmanagement to the board and areonly interested in financial returnsHigh – ability to vote out existingmanagementEmployees Customers Medium – in a high skill industryemployees are interested in the newopportunities which the market canpresentLow – although there is a group ofkey employees in productdevelopment whose skills must notbe lostMedium – some of the parts supplied High – as there are few majorby Boltzman are unique and players in the aerospace and specifically designed for the customer automotive businesses, the loss of acustomer would have a significantimpact on BoltzmanSuppliers Medium – Boltzman is one of thelarge customers to many of thecompany’s suppliers Low – the suppliers are generally bulk component producers and there is significant competition for Boltzman’s businessSuggested performance measures:–––––Return on capital employed Economic value added Revenue growthAverage pay per employee Net profit marginAppendix 2The figures are drawn from the financial statements for the year to September 2014.Boltzman$m General Machines$m2014 2014Revenue Cost of sales Other costs 23,94318,07825,69520,605 2,958 3,208 ––––––––––––––Operating profit Financing costs Tax2,9072911,882316 663 718 ––––––––––––––Net income 1,953 848––––––––––––––Boltzman General Machines$m 2013$m2014$m2013$m2014Non-current assets Current assets 16,335 16,988 17,716 17,893 10,618 11,043 11,515 11,630 ––––––––––––––––––––––––––––26,953–––––––8,9849,80128,031–––––––9,9619,73929,231–––––––29,523–––––––10,08310,405EquityNon-current liabilities Current liabilities9,74410,6298,168 8,331 8,858 9,035 ––––––––––––––––––––––––––––26,953 28,031 29,231 29,523 ––––––––––––––––––––––––––––Boltzman 2014 General Machines2014Notes:No of employeesStaff costsRevenue for 2013 Product development costs86,6204,73122,5062,68493,9404,91325,4382,630 ($m)($m)($m)No. of top 10 biggest potential customers where the business has top tier supplier statusAerospace 67 6 8AutomotiveA suitable cost of capital for both companies is 11%.The tax rate is 28%.Appendix 3Extract of Head of Aerospace’s email on his quality initiative:In order to improve the quality and profitability of our products, we intend to begin by introducing a lean approach to manufacturing.The first step in our move to lean manufacturing will be the introduction of JIT manufacturing. Although this will bea difficult process, the financial rewards in reduced working capital required and a decluttering of the workplace should be significant. We will have to consider how this change impacts up and down our supply chain with customers and suppliers.Section B – TWO questions ONLY to be attempted2 Beeshire Local Authority (BLA) is a local government body which provides a range of services for the area of Beeshirewithin the country of Seeland. Beeshire is a wealthy area within the country with many tourist attractions. One of BLA’s tasks is to ensure that waste is collected from the homes and businesses in Beeshire. The goal for BLA’s waste management department is ‘to maintain Beeshire as a safe, clean and environmentally friendly place where people and businesses want to both stay in and return to.’ The need for waste collection is linked to public health concerns, the desire to keep the streets clean and attractive and the desire to increase the amount of rubbish which is recycled.BLA is funded through a single local tax and does not charge its residents or businesses separately for most of its services, including waste collection. There is no public or political appetite for outsourcing services such as waste management.Waste collection is performed by the workforce using a fleet of vehicles. The waste is either taken to recycling plants or else to landfill sites for burying. BLA obtains revenues from all the recycled waste but this only just covers the cost of running the recycling facilities.Against a background estimate that waste will increase by 1% p.a. in the future, the national government has ordered local authorities, such as BLA, to promote the recycling of waste and has set a target of 40% of all waste to be recycled by 2015. In order to discourage the creation of non-recyclable waste, the government has imposed a levy per tonne of waste buried in landfill sites and has stated that this levy will rise over the next five years in order to encourage continuing improvement in the amount of recycled waste.Currently, Seeland is in a long recession and so local authority revenues have fallen as tax revenues reflect the poor state of the economy. Along with other local authorities, BLA has tried to cut costs and so has focused on financial measures of performance. In a recent, private meeting, the chief executive of BLA was heard to say ‘keep costs under control and we will worry about quality of service only when complaint levels build to an unaccept able level.’ As one of the area’s largest employers, cutting staff numbers has been very difficult for BLA due to the impact on the local economy and the reaction of the residents.The current performance indicators used at BLA are drawn from the existing information systems with national figures given for comparison. Those relating to waste collection for the year ending 31 March 2014 are:BLA Nationaltotal Total cost ($m) 250 2,850Volume of wastelandfilled recycled total (tonnes)(tonnes)(tonnes)1,250,000950,0002,200,00013,750,0009,500,00023,250,000No. of staff Staff cost3,50011039,9001,190 ($m)No. of householdsNo. of complaints about waste uncollected 2,380,95218,25026,190,476200,750BLA NationalaverageFrequency of waste collections (days) 14 12 Notes on BLA data:1.2.3.4.5. Cost data and no. of households comes from BLA’s financial systems.Waste data comes from weighing lorries at the landfill sites and recycling facilities.Staff data is collected from BLA’s HR system.Complaints data is based on numbers of letters and phone calls to the waste management department. Frequency of collection data is obtained from the department’s vehicle schedules.Required:(a) Explain why non-financial indicators are particularly useful for public sector organisations, illustrating youranswer with brief examples relevant to BLA. (6 marks) (b) Explain how the value for money provision of waste services by BLA should be assessed by suggesting andcalculating justified performance indicators using the information in the scenario. (12 marks) (c) Discuss the difficulties of measuring qualitative factors of performance, suggesting appropriate solutions forBLA. (7 marks)(25 marks)3Maxwell Electricity Generation (Maxwell) is an electricity-generating firm producing power for industry and the general public in the country of Deeland. In the past, the company has been dominated by the need to make suitable returns on capital for its shareholders.All power stations work in broadly the same way by taking in fuel (coal, gas or nuclear) and producing electricity and waste products.Maxwell has the following mix of power stations: Details for each type of station Totals for MaxwellTotal capitalinvested ($m)5,280 10,560 2,400 1,800 Power station typeMaximum generating power (MW) 300 Operating cost of electricity ($/MWh) 25 Capital cost ($m) Number of stations Total CO2emissions(million tonnes)Coal (small)(large) (small) (large)1,320 2,640 300 4 4 8 2 2 3·15 12·61 3·15 600 300 25 50 Gas 900 50 900 7·10 Nuclear1,200 20 6,00012,000 0·50––––––– –––––– 32,040 26·51Notes:1. 2. Maximum generating power is the output of the station measured in megawatts (MW) at 100% operatingcapacity. The electricity produced by a station is measured in megawatt hours (MWh).It is assumed that the same load factor applies across all the different types of station, i.e. they are working atthe same percentage of capacity throughout the year.3. 4. 5. Operating cost of electricity is the cost before the cost of financing the capital invested in a station.The CO 2 (carbon dioxide) emissions are estimated based on industry standard figures for similar stations. Capital costs and CO 2 emission figures are current best estimates.The business has two alternative plans (plans 1a and 1b) to maintain current generating capacity while plan 2 will grow the business.Plan 1aBuild a new nuclear power station (the same as the existing nuclear type) to replace one of the 300 MW coal stations, one of the 600 MW coal stations and, also, one of the 300 MW gas stations. The stations being replaced are all reaching the end of their useful lives.Plan 1bReplace the gas and coal stations mentioned in plan 1a with equivalent gas and coal stations, thus maintaining the current generating mix.Plan 2In order to grow the business, a new nuclear station is being considered in combination with one of plan 1a or 1b. This new nuclear station would be the same as the existing stations.Maxwell is trying to raise finance for either plan 1a or plan 1b and, in addition to one of these plans, plan 2. A nuclear plant takes about five years to build (assuming no regulatory difficulties or problems over the design choice). It has a working life of 40 years and costs about $1bn at current prices to decommission although this estimate is uncertain as each site is unique in the decommissioning difficulties which it presents.The government of Deeland has joined the international community in pledging to have greater concern for the environment. Initially, it has stated that there is a national goal to reduce carbon dioxide emissions by 20% in the next five years. The government is aware that electricity demand is estimated to rise by around 10% over the next five years, nevertheless, it is strongly encouraging businesses to help achieve this reduction in CO 2 emissions. There is a proposal to raise a carbon tax on CO emissions in order to encourage reductions. The government is also 2concerned that there are other pollutants emitted by power stations but has decided to focus efforts on CO 2 initially, as it is a key cause of climate change.In order to join the wider community in achieving these aims and as one of the major electricity generators in Deeland, Maxwell has stated its own environmental goal as:‘to help reach national targets for reduction in CO2 emissions while maintaining our ability to contribute to the electricity needs of the people of Deeland.’The finance director is interested in broadening environmental reporting within the company and has asked you ashis performance measurement expert to explain how input/output analysis would help. He needs to know how thiswill broaden performance measurement at Maxwell. Lastly, he wants to understand the impact of this analysis on the management information systems which are currently set up for periodic financial reporting purposes.Required:(a) Using Maxwell’s stated environmental goal, assess the proposed investment plans 1a and 2.(10 marks)(6 marks)(b) Discuss the lifecycle costing issues associated with Plan 2.(c) Explain how the introduction of input/output analysis will affect environmental performance measurementand information systems at Maxwell. (9 marks)(25 marks)4 Culam Mining (Culam) is a mineral ore mining business in the country of Teeland. It owns and operates four mines.A mine takes on average two years to develop before it can produce ore and the revenue from the mine is split (25:75)between selling the ore under fixed price contracts over five years and selling on the spot market. The bulk of the business’s production is expo rted. A mine has an average working life of about 20 years before all the profitable ore is extracted. It then takes a year to decommission the site and return the land to a useable form for agriculture or other developments.Recently, one of Culam’s fore ign competitors surprised the market by becoming insolvent as a result of paying too much to acquire a competitor when the selling price of their minerals dipped as the world economy went into recession. As a result, the chief executive officer (CEO) wanted to know if this was likely to happen to Culam. She had read about the Altman Z-score as a way of predicting corporate failure and had a business analyst prepare a report calculating the Z-score for Culam. The report is summarised below:Analyst’s Report (extract)The Altman Z-score model is:Z = 1·2X1 + 1·4X2 + 3·3X3 + 0·6X4 + X5Another quantitative model (Q-score model) has been produced by academics working at Teeland’s main university based on recent data from listed companies on the small Teeland stock exchange. It is:Q = 1·4X1 + 3·3X3 + 0·5X4 + 1·1X5 + 1·7X6Where for both models:X1 is working capital/total assets;X2 is retained earnings reserve/total assets;X3 is profit before interest and tax/total assets;X4 is market value of equity/total long-term debt (MVe/total long-term debt);X5 is revenue/total assets;andX6 is current assets/current liabilities.Using the most recent figures from Culam’s financial statements (year ending September 2014), Culam’s Altman Z-score is 3·5 and its score from the other model (Q) is 3·1.For both models, a score of more than 3 (for Z or Q) is considered safe and at below 1·8, the company is at risk of failure in the next two years.The analyst had done what was asked and calculated the score but had not explained what it meant or what action should be taken as a result. Therefore, the CEO has turned to you to help her to make sense of this work and for advice about how to use the information and how Culam should proceed into the future.Required:(a) Evaluate both the result of the analyst’s calculations and the appropriateness of these two models for Culam.(10 marks)(b) Explain the potential effects of a mine’s lifecycle on Culam’s Z-score and the company’s probability of failure.Note: You should ignore its effect on the Q-score. (7 marks)(c) Give four detailed recommendations to reduce the probability of failure of Culam, providing suitablejustifications for your advice. (8 marks)(25 marks)Present Value TablePresent value of 1 i.e. (1 +r)–nWhere r = discount raten = number of periods until paymentDiscount rate (r)Periods(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%12345 0·9900·9800·9710·9610·9510·9800·9610·9420·9240·9060·9710·9430·9150·8880·8630·9620·9250·8890·8550·8220·9520·9070·8640·8230·7840·9430·8900·8400·7920·7470·9350·8730·8160·7630·7130·9260·8570·7940·7350·6810·9170·8420·7720·7080·6500·9090·8260·7510·6830·62112345678910 0·9420·9330·9230·9140·9050·8880·8710·8530·8370·8200·8370·8130·7890·7660·7440·7900·7600·7310·7030·6760·7460·7110·6770·6450·6140·7050·6650·6270·5920·5580·6660·6230·5820·5440·5080·6300·5830·5400·5000·4630·5960·5470·5020·4600·4220·5640·5130·4670·4240·3866789101112131415 0·8960·8870·8790·8700·8610·8040·7880·7730·7580·7430·7220·7010·6810·6610·6420·6500·6250·6010·5770·5550·5850·5570·5300·5050·4810·5270·4970·4690·4420·4170·4750·4440·4150·3880·3620·4290·3970·3680·3400·3150·3880·3560·3260·2990·2750·3500·3190·2900·2630·2391112131415(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%12345 0·9010·8120·7310·6590·5930·8930·7970·7120·6360·5670·8850·7830·6930·6130·5430·8770·7690·6750·5920·5190·8700·7560·6580·5720·4970·8620·7430·6410·5520·4760·8550·7310·6240·5340·4560·8470·7180·6090·5160·4370·8400·7060·5930·4990·4190·8330·6940·5790·4820·40212345678910 0·5350·4820·4340·3910·3520·5070·4520·4040·3610·3220·4800·4250·3760·3330·2950·4560·4000·3510·3080·2700·4320·3760·3270·2840·2470·4100·3540·3050·2630·2270·3900·3330·2850·2430·2080·3700·3140·2660·2250·1910·3520·2960·2490·2090·1760·3350·2790·2330·1940·1626789101112131415 0·3170·2860·2580·2320·2090·2870·2570·2290·2050·1830·2610·2310·2040·1810·1600·2370·2080·1820·1600·1400·2150·1870·1630·1410·1230·1950·1680·1450·1250·1080·1780·1520·1300·1110·0950·1620·1370·1160·0990·0840·1480·1240·1040·0880·0740·1350·1120·0930·0780·0651112131415Annuity Table1 – (1 + r)–nPresent value of an annuity of 1 i.e. ————––rWhere r = discount raten = number of periodsDiscount rate (r)Periods(n) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%12345 0·9901·9702·9413·9024·8530·9801·9422·8843·8084·7130·9711·9132·8293·7174·5800·9621·8862·7753·6304·4520·9521·8592·7233·5464·3290·9431·8332·6733·4654·2120·9351·8082·6243·3874·1000·9261·7832·5773·3123·9930·9171·7592·5313·2403·8900·9091·7362·4873·1703·79112345678910 5·7956·7287·6528·5669·4715·6016·4727·3258·1628·9835·4176·2307·0207·7868·5305·2426·0026·7337·4358·1115·0765·7866·4637·1087·7224·9175·5826·2106·8027·3604·7675·3895·9716·5157·0244·6235·2065·7476·2476·7104·4865·0335·5355·9956·4184·3554·8685·3355·7596·1456789101112131415 10·368 9·78711·255 10·575 9·95412·134 11·348 10·635 9·98613·004 12·106 11·296 10·563 9·8999·253 8·7609·3858·3068·8639·3947·8878·3848·8539·2957·4997·9438·3588·7459·1087·1397·5367·9048·2448·5596·8057·1617·4877·7868·0616·4956·8147·1037·3677·6061112131415 13·865 12·849 11·938 11·118 10·380 9·712(n) 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%12345 0·9011·7132·4443·1023·6960·8931·6902·4023·0373·6050·8851·6682·3612·9743·5170·8771·6472·3222·9143·4330·8701·6262·2832·8553·3520·8621·6052·2462·7983·2740·8551·5852·2102·7433·1990·8471·5662·1742·6903·1270·8401·5472·1402·6393·0580·8331·5282·1062·5892·99112345678910 4·2314·7125·1465·5375·8894·1114·5644·9685·3285·6503·9984·4234·7995·1325·4263·8894·2884·6394·9465·2163·7844·1604·4874·7725·0193·6854·0394·3444·6074·8333·5893·9224·2074·4514·6593·4983·8124·0784·3034·4943·4103·7063·9544·1634·3393·3263·6053·8374·0314·1926789101112131415 6·2076·4926·7506·9827·1915·9386·1946·4246·6286·8115·6875·9186·1226·3026·4625·4535·6605·8426·0026·1425·2345·4215·5835·7245·8475·0295·1975·3425·4685·5754·8364·9885·1185·2295·3244·6564·7934·9105·0085·0924·4864·6114·7154·8024·8764·3274·4394·5334·6114·6751112131415End of Question Paper。