I have my exam in few days and I am struggling with some of the syllabus in F2 BPP book. There are hardly any examples in practice and revision book and on this subject by the sound of it there will be some in the actual test.
One question is on NPV and IRR
1. Using an interest rate of 10% per year the net present value of a project has been correctly calculated as $50. If the interest rate is increased by 1% the NPV of the project falls by $20.
Result - 12.5%
The calculation in the book is 10% + (50/60) x (10%-13%)
How did they get to the 60 and the 13%?
The other question is on Total quality management - there is not a single example in my book and in the mock test there is one. No idea at all what to do with that. Plus I think there is part of the question that is missing:
A company uses total quality management TQM and has recorded the following cost of quality for a period.
staff training 8000
inspection 12000
warranty claims 20000
of fault items detected before delivery to customers 15000
What would be the net benefit of spending an extra
a. 2000
b. 3200
c. 5000
d.6200
In result it says (20000 x 20%) - (8000 x 10%) = 3200
Where did they took the 20% and 10%. Is it missing from the question???
I think that I would need to see the questions in the original form as these ones are not making a great deal of sense to me (i.e. spending an extra 2000, 3200,5000, 6200 on what?).
I'm really quite worried about the book that your using for your studies as it seems that the ROI / RI issue wasn't an issolated incident.
I've had a look in my old BPP book for paper 1.2 (the forerunner of F2) and there doesn't seem to be any questions similar to the one's that you are having issues with here (sometimes some questions get carried forward year to year so I would still have been able to help from an old book).
You could try posting the question on the Opentuition forum for F2 as there wiill be people there who have struggled through the same question.
Unfortunately, in this instance both questions seem to have something missing as they are not making a great deal of sense to me and I don't have the book that you are using (I'm now fully sworn off BPP books as we discussed in the other thread).
If there is a lot missing from the questions in the above post you could try reposting giving the exact wording from the book. I apprecaite that maybe a big task a couple of days before the exam (assume that this is either a mock or a computerised paper) but as the above stands I'm not sure that anyone without access to a copy of the book will be able to offer much help.
Sorry that I'm not much help in this instance,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hello Shaun,
Thank you for your reply.
I have posted it on the open tuition, but no answer just loads of "dating" emails.....strange. Anyway. The questions are copied exactly from the book. Not a word missing. I have already emailed BPP but they are just ignoring me. Really not happy with them at all.
The syllabus has changed quite a lot since November 11, this is a new stuff and I think that nobody actually proof read the book. So annoying.
I hope I will not fail the exam.
Thank you anyway.
