Quick revision using 3 constructed response questions

What you will learn

Method to tackle Constructed Response Questions in the paper

Exam Tips

Working Capital Management CR Question

Investment Appraisal CR Question

Business Finance CR Question

Description

  • This is a FREE Revision
  • I have covered three constructed response questions and for each question, a detailed answer has been provided
  • I have explained how to tackle constructed response questions in the exam
  • Provided some useful exam tips
  • The first question is from working capital management. The following areas have been discussed in the question.- With recourse and without recourse calculation- Benefit from the services offered by the factoring company.

    – Discuss THREE factors that determine the level of a company’s investment in working capital

  • The second question is from investment appraisal. The following areas have been discussed in the question.- Calculate the expected net present value of the investment project and comment on its financial acceptability.- Distinguish between risk and uncertainty and briefly explain why they should be considered in the investment appraisal process.

    – Critically discuss if sensitivity analysis will assist the company in assessing the risk of the investment project.

  • The third question is from business finance. The following areas have been discussed in the question.- Calculate the market value after-tax weighted average cost of capital, before the new issue of bonds takes place and after the new issue of bonds takes place.- Discuss the director’s view that issuing traded bonds will decrease the weighted average cost of capital of the company and thereby increase the market value of the company.

English

Language

Content

Introduction

Introduction

Section C – Working Capital Management


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Section C – Working Capital Management

Section D – Investment Appraisal

Section D – Investment Appraisal

Section E – Business Finance

Section E – Business Finance

Exam Tips

Exam Tips