Paper P9 – Management Accounting Financial Strategy Post Exam Guidebook May 2006 Exam Examiner's General Responses The functionality on Paper P9 was extremely disappointing. Various candidates seemed to have done very little preparation. It had been noted inside the November 2005 Post Exam Guide that numerous candidates proven poor familiarity with even quite basic economic calculations which their grasp of many simple concepts was also limited. These weaknesses are still noticeable in May 06\. A further weakness was the poor presentation and structure of candidates' alternatives. Question One appeared to present candidates with particular difficulties despite signs to giving an answer to the question (and (a) (i) in particular) being clearly evident in the scenario. Question Two was a normal working capital supervision and loans question, though it was avoided by the most of candidates and many candidates overlooked the auto financing aspects of the question. Question 3 was a lot more unpopular, even though it required quite straightforward computations of the produce to maturity of a relationship and a conversion benefit of a convertible bond which in turn provided quickly accessible marks for the well-prepared prospect. Questions Four and Five were the most popular with the optional questions on this paper. Answers to Question Several were unsatisfactory as many prospects were unable to apply the APV approach appropriately and handful of candidates employed an ungeared cost of collateral in the NPV base calculation. Question Five was generally well clarified with many candidates to be able to make a fair attempt at the NPV measurements and pull basic conclusions from the effects. However , handful of were able possibly to calculate appropriate Orina based on rationed cash moves, or to " stand back” from the NPV and PI results and use these kinds of to help discover the best overall combination of tasks. In the parts below that explain the way the marking structure was utilized, where the brief review says " up to several marks are available for each valid point”, 0. 5 marks are awarded for a bullet point, 1 mark for a few attempt at (correct and valid) discussion, growing to 3 marks for good discussion of the point using appropriate illustrative examples. The published answers are used being a guide (these are available like a download by CIMA Submitting – click on the link around the CIMA internet site www.cimaglobal.com). Markings are also granted for candidates' own valid comments which may not be in the tagging guide and also the published answers. Where represents are proven for measurements, the tag shown may be the maximum offered assuming calculations are all correct. Marks are available for recognition of correct approach and understanding. Note that inside the marking structure the total of the marks available for particular activities may possibly total more than marks mentioned on the problem paper. This is to allow a few flexibility in marking, nevertheless the maximum signifies that can be awarded for a section of a question cannot exceed the quantity of marks suggested on the query paper.
The Chartered Company of Managing Accountants
Paper P9 – Management Accounting Financial Approach Post Test Guide May well 2006 Test
Question 1 (a) Suppose you will be one of the monetary advisors earning a living for PM. (i) Explain, with supporting measurements, how the Financial Director and advisors of PM have arrived at their particular estimates of post-merger ideals. (10 marks) Calculate and comment in brief on the probably impact on the share value and market capitalisation to get PM and NQ Inc when the bid terms happen to be announced. Make appropriate assumptions based on the information given in the scenario. (4 marks) In the event NQ rejects the terms offered, calculate • • the maximum total amount and price per share being paid for the entity; as well as the resulting discuss exchange terms PM must be prepared to acknowledge without minimizing PM's aktionar wealth. (6 marks) (Total for part (a) = 20 marks) Rationale The question involves, partly (a), explaining the computations for estimates...