,Editionp4,pVersionp1
ISBNp978-1-84808-324-0
Publishedpby
GetpThroughpGuidespLtd.
p65pBedfordpStreetpSouth
pLeicesterpLE1p3JRpUnit
edpKingdom
Website:pwww.GetThroughGuides.com
Email:
Onlinepcontentpfeedbackpform:phttp://gtgtraining.com/studymaterialfeedback/
Forpsuggestions:
p
StudentpSupportpForum:phttp://GetthroughGuides.co.uk/forum
TheppublisherpispgratefulptopthepAssociationpofpCharteredpCertifiedpAccountantspforppermissionptopreproduceppastp
examinationpquestionspandptheirpanswers.
Limitpofpliabilityp/pDisclaimerpofpwarranty:p Whileptheppublisherphaspusedpitspbestpeffortspinppreparingpthispbook,pitpm
akespnopwarrantiesporprepresentationspwithprespectptopthepaccuracyporpcompletenesspofpcontentspofpthispbookpand
pspecificallypdisclaimspanypimpliedpwarrantiespofpmerchantabilityporpfitnesspforpanypspecificporpgeneralp purpose.pN
op warrantyp mayp bep createdp orp extendedp byp salesp orp otherp representativesp orp writtenp salespmaterial.pEachp
companyp isp differentp andp thep suggestionsp madep inp thisp bookp mayp notp suitp ap particularppurpose.pCompanies
/individualspshouldpconsultpprofessionalspwherepappropriate.p Theppublisherpshallpnotpbepliablepforpanyplosspofpprof
itporpotherpcommercialpdamagespincludingpbutpnotplimitedptopspecial,pincidental,pconsequentialporpotherpdamages.
Allprightspreserved.pNoppartpofpthisppublicationpmaypbepreproduced,pstoredpinpapretrievalpsystemporptransmitted,pinp
anypformporpbypanypmeans,pelectronic,pmechanical,pphotocopying,pscanningporpotherwise,pwithoutptheppriorp writte
nppermissionpofpGetpThroughpGuidespLtd.
Nopresponsibilitypforpanyplossptopanyonepactingporprefrainingpfrompactionpaspapresultpofpanypmaterialpinpthisppublica
tionpcanpbepacceptedpbypthepauthor,peditorporppublisher.
Pleasepcheckpthepbackpofpthispbookpforpanypupdatesp/perrata.p Furtherplivepupdatesp/perratapmaypalsopbepfoundponli
neponpthepGetpThroughpGuidespStudentpSupportpForumpat:phttp://getthroughguides.co.uk/forum.pStudentsparepad
visedptopcheckpbothpofptheseplocations.
©pGetpThroughpGuidesp2012
, Aboutptheppaper i - v
Question
Topic Name Marks PagepNumbers
pnumber
Question Solution
pbank pbank
Section A p
FinancialpManagementpFunction
1 10 1p-p1 59p-p59
EPSpandpShareholderpwealthpmaximis
2 JJGpCo 25 1p-p2 60p–p62
ation
3 Multiplepstakeholders 10 2p-p2 63p-p64
Section B p FinancialpManagementpEnvironment
4 Financialpmanagementpenvironment Tagna 25 3p-p3 65p–p66
5 Financialpintermediary 10 4p-p4 67p-p67
6 Rolepofpfinancialpintermediaries APXpCo 25 4p-p5 68p-p70
7 Bankspandpmoneypmarkets 10 5p-p5 71p-p71
Section C p WorkingpCapitalpManagement
8 EOQpandpreceivablespmanagement AsifcopInc 25 7p-p8 73p–p75
9 FactoringpandpInvoicepdiscounting HudsonpLtd 25 8p-p8 76p–p78
Workingpcapitalpmanagementpandpfact
10 AnjopLtd 25 9p-p10 78p–p 80
oring
11 Foreignpreceivablespmanagement SprinterpPlc 25 10p–p11 80p–p81
12 Discountppolicypforppromptppayment ArespLtd 25 11p–p12 82p–p83
13 Earlypsettlementpdiscount PNPpLtd 25 12p–p12 83p–p85
14 Earlypsettlementpdiscount VelmpCo 25 13p–p13 85p–p87
15 CashpbudgetpandpBaumolpmodel ThornepCo 25 14p-p14 88p–p89
16 EOQpandpFactoring FLGpCo 25 14p–p15 90p–p94
17 Overtradingpandpfactoring DoepLtd 25 15p–p16 94p–p97
EOQp&phedgingpforeignpaccountsppaya
17 PKApCo 25 17p–p17 97p–p100
ble
19 EOQpmodel TNGpCo 25 17p–p18 100p–p102
Section D p InvestmentpAppraisal
20 Proposedpinvestmentp-pNPVpandpIRR CharmpInc 25 19p–p19 103p–p105
21 Specificpinvestmentpdecisionp-pNPV LeamingerpInc 25 20p–p20 105p–p108
22 NPVpandpIRR PVpCo 25 21p-p21 108p–p110
23 NPVpandpIRR DuopCo 25 21p-p22 111p–p113
24 Proposedpinvestmentp-pNPVpandpIRR ParadisepLtd 25 22p-p23 113p–p115
25 NPVpandpprojectpevaluationpstages BasrilpInc 25 23p–p24 115p–p117
26 Netppresentpvalue PainlesspCo 25 24p–p24 117p–p118
Bramblingp(Electronics
27 Sensitivitypanalysis 25 25p–p25 118p–p120
pLtd)
28 Sensitivitypanalysis UmunatpLtd 25 26p-p26 120p–p122
29 NPVpandpProposedpInvestment SCpCo 25 26p-p27 122p–p124
30 3Financingpcashpflows ASOPpCo 25 27p-p27 125p–p127
, Section E p
BusinesspFinance
Financepforpsmallpandpmediumpsizedpe
31 LaviniapproductspLtd 25 29p-p30 129p–p131
ntities
32 Rightspissue SmithpLtd 25 30p-p30 131p–p134
Evaluationpofpapnewpfinancialppropos
33 ArwinpLtd 25 31p-p31 134p–p138
al
34 Sourcespofpfinance McTeepPlc 25 32p-p33 138p–p141
35 Rightspissuepofpshares TranscopLtd 25 33p–p33 141p–p143
36 Evaluationpofpsourcespofpfinance EchopCo 25 33p–p34 143p–p147
37 Sourcespofpfinance TirwenpLtd 25 35p-p35 147p–p150
38 Ratiopanalysispandpsourcespofpfinance TFRpLtd 25 36p–p36 150p–p152
39 Shortptermpfinance 10 36p–p36 153p–p153
40 Islamicpfinance 20 36p-p36 154p–p155
41 DividendpPolicy AnafipCo 25 37p-p37 155p–p156
Section F p CostpofpCapital
42 ModiglianipMillerp&pcapitalpstructure NereuspandpJanuspLtd 25 39p–p39 157p–p158
43 Costpofpcapital PirinpCo 25 40p–p41 158p–p160
44 ModiglianipMillerp&pcostpofpcapital GurwinpLtd 25 41p–p42 161p–p162
45 Capitalpassetppricingpmodelp(CAPM) RupabpCo 25 42p–p42 162p–p164
46 Costpofpcapital SelwynpLtd 25 42p-p43 164p–p165
Weightedpaveragepcostpofpcapitalp(WA
47 PolstronpLtd 25 43p-p43 166p–p168
CC)
48 Capitalpstructure ReliablepLtd 25 44p-p44 168p–p171
49 Costpofpcapitalpandpdividendppolicy DDpCo 25 45p-p45 172p-p174
Section G p BusinesspValuations
50 Businesspvaluations GreenwoodpLtd 25 47p–p47 175p–p177
StanzialpIncpandpBesse
51 Valuationpmethod 25 48p–p49 177p–p180
rlotpLtd
OaktonpIncpandpMallar
52 Businesspvaluation 25 49p-p50 180p–p182
dpInc
53 Valuationpofpshares SomervillepLtd 25 50p-p51 183p–p184
OlivinepLtdpandpHalitep
54 Businesspvaluations 25 52p–p53 184p–p186
Ltd
Valuationpofpbusiness/convertiblepbo PhobispCopandpDanoc
55 25 53p-p53 186p-p189
nd apCo
56 Valuationpofpconvertiblepdebentures Techfools.com 25 54p-p54 189p–p191
ISBNp978-1-84808-324-0
Publishedpby
GetpThroughpGuidespLtd.
p65pBedfordpStreetpSouth
pLeicesterpLE1p3JRpUnit
edpKingdom
Website:pwww.GetThroughGuides.com
Email:
Onlinepcontentpfeedbackpform:phttp://gtgtraining.com/studymaterialfeedback/
Forpsuggestions:
p
StudentpSupportpForum:phttp://GetthroughGuides.co.uk/forum
TheppublisherpispgratefulptopthepAssociationpofpCharteredpCertifiedpAccountantspforppermissionptopreproduceppastp
examinationpquestionspandptheirpanswers.
Limitpofpliabilityp/pDisclaimerpofpwarranty:p Whileptheppublisherphaspusedpitspbestpeffortspinppreparingpthispbook,pitpm
akespnopwarrantiesporprepresentationspwithprespectptopthepaccuracyporpcompletenesspofpcontentspofpthispbookpand
pspecificallypdisclaimspanypimpliedpwarrantiespofpmerchantabilityporpfitnesspforpanypspecificporpgeneralp purpose.pN
op warrantyp mayp bep createdp orp extendedp byp salesp orp otherp representativesp orp writtenp salespmaterial.pEachp
companyp isp differentp andp thep suggestionsp madep inp thisp bookp mayp notp suitp ap particularppurpose.pCompanies
/individualspshouldpconsultpprofessionalspwherepappropriate.p Theppublisherpshallpnotpbepliablepforpanyplosspofpprof
itporpotherpcommercialpdamagespincludingpbutpnotplimitedptopspecial,pincidental,pconsequentialporpotherpdamages.
Allprightspreserved.pNoppartpofpthisppublicationpmaypbepreproduced,pstoredpinpapretrievalpsystemporptransmitted,pinp
anypformporpbypanypmeans,pelectronic,pmechanical,pphotocopying,pscanningporpotherwise,pwithoutptheppriorp writte
nppermissionpofpGetpThroughpGuidespLtd.
Nopresponsibilitypforpanyplossptopanyonepactingporprefrainingpfrompactionpaspapresultpofpanypmaterialpinpthisppublica
tionpcanpbepacceptedpbypthepauthor,peditorporppublisher.
Pleasepcheckpthepbackpofpthispbookpforpanypupdatesp/perrata.p Furtherplivepupdatesp/perratapmaypalsopbepfoundponli
neponpthepGetpThroughpGuidespStudentpSupportpForumpat:phttp://getthroughguides.co.uk/forum.pStudentsparepad
visedptopcheckpbothpofptheseplocations.
©pGetpThroughpGuidesp2012
, Aboutptheppaper i - v
Question
Topic Name Marks PagepNumbers
pnumber
Question Solution
pbank pbank
Section A p
FinancialpManagementpFunction
1 10 1p-p1 59p-p59
EPSpandpShareholderpwealthpmaximis
2 JJGpCo 25 1p-p2 60p–p62
ation
3 Multiplepstakeholders 10 2p-p2 63p-p64
Section B p FinancialpManagementpEnvironment
4 Financialpmanagementpenvironment Tagna 25 3p-p3 65p–p66
5 Financialpintermediary 10 4p-p4 67p-p67
6 Rolepofpfinancialpintermediaries APXpCo 25 4p-p5 68p-p70
7 Bankspandpmoneypmarkets 10 5p-p5 71p-p71
Section C p WorkingpCapitalpManagement
8 EOQpandpreceivablespmanagement AsifcopInc 25 7p-p8 73p–p75
9 FactoringpandpInvoicepdiscounting HudsonpLtd 25 8p-p8 76p–p78
Workingpcapitalpmanagementpandpfact
10 AnjopLtd 25 9p-p10 78p–p 80
oring
11 Foreignpreceivablespmanagement SprinterpPlc 25 10p–p11 80p–p81
12 Discountppolicypforppromptppayment ArespLtd 25 11p–p12 82p–p83
13 Earlypsettlementpdiscount PNPpLtd 25 12p–p12 83p–p85
14 Earlypsettlementpdiscount VelmpCo 25 13p–p13 85p–p87
15 CashpbudgetpandpBaumolpmodel ThornepCo 25 14p-p14 88p–p89
16 EOQpandpFactoring FLGpCo 25 14p–p15 90p–p94
17 Overtradingpandpfactoring DoepLtd 25 15p–p16 94p–p97
EOQp&phedgingpforeignpaccountsppaya
17 PKApCo 25 17p–p17 97p–p100
ble
19 EOQpmodel TNGpCo 25 17p–p18 100p–p102
Section D p InvestmentpAppraisal
20 Proposedpinvestmentp-pNPVpandpIRR CharmpInc 25 19p–p19 103p–p105
21 Specificpinvestmentpdecisionp-pNPV LeamingerpInc 25 20p–p20 105p–p108
22 NPVpandpIRR PVpCo 25 21p-p21 108p–p110
23 NPVpandpIRR DuopCo 25 21p-p22 111p–p113
24 Proposedpinvestmentp-pNPVpandpIRR ParadisepLtd 25 22p-p23 113p–p115
25 NPVpandpprojectpevaluationpstages BasrilpInc 25 23p–p24 115p–p117
26 Netppresentpvalue PainlesspCo 25 24p–p24 117p–p118
Bramblingp(Electronics
27 Sensitivitypanalysis 25 25p–p25 118p–p120
pLtd)
28 Sensitivitypanalysis UmunatpLtd 25 26p-p26 120p–p122
29 NPVpandpProposedpInvestment SCpCo 25 26p-p27 122p–p124
30 3Financingpcashpflows ASOPpCo 25 27p-p27 125p–p127
, Section E p
BusinesspFinance
Financepforpsmallpandpmediumpsizedpe
31 LaviniapproductspLtd 25 29p-p30 129p–p131
ntities
32 Rightspissue SmithpLtd 25 30p-p30 131p–p134
Evaluationpofpapnewpfinancialppropos
33 ArwinpLtd 25 31p-p31 134p–p138
al
34 Sourcespofpfinance McTeepPlc 25 32p-p33 138p–p141
35 Rightspissuepofpshares TranscopLtd 25 33p–p33 141p–p143
36 Evaluationpofpsourcespofpfinance EchopCo 25 33p–p34 143p–p147
37 Sourcespofpfinance TirwenpLtd 25 35p-p35 147p–p150
38 Ratiopanalysispandpsourcespofpfinance TFRpLtd 25 36p–p36 150p–p152
39 Shortptermpfinance 10 36p–p36 153p–p153
40 Islamicpfinance 20 36p-p36 154p–p155
41 DividendpPolicy AnafipCo 25 37p-p37 155p–p156
Section F p CostpofpCapital
42 ModiglianipMillerp&pcapitalpstructure NereuspandpJanuspLtd 25 39p–p39 157p–p158
43 Costpofpcapital PirinpCo 25 40p–p41 158p–p160
44 ModiglianipMillerp&pcostpofpcapital GurwinpLtd 25 41p–p42 161p–p162
45 Capitalpassetppricingpmodelp(CAPM) RupabpCo 25 42p–p42 162p–p164
46 Costpofpcapital SelwynpLtd 25 42p-p43 164p–p165
Weightedpaveragepcostpofpcapitalp(WA
47 PolstronpLtd 25 43p-p43 166p–p168
CC)
48 Capitalpstructure ReliablepLtd 25 44p-p44 168p–p171
49 Costpofpcapitalpandpdividendppolicy DDpCo 25 45p-p45 172p-p174
Section G p BusinesspValuations
50 Businesspvaluations GreenwoodpLtd 25 47p–p47 175p–p177
StanzialpIncpandpBesse
51 Valuationpmethod 25 48p–p49 177p–p180
rlotpLtd
OaktonpIncpandpMallar
52 Businesspvaluation 25 49p-p50 180p–p182
dpInc
53 Valuationpofpshares SomervillepLtd 25 50p-p51 183p–p184
OlivinepLtdpandpHalitep
54 Businesspvaluations 25 52p–p53 184p–p186
Ltd
Valuationpofpbusiness/convertiblepbo PhobispCopandpDanoc
55 25 53p-p53 186p-p189
nd apCo
56 Valuationpofpconvertiblepdebentures Techfools.com 25 54p-p54 189p–p191