ACCA Paper FM Financial Management September 2019 Mock C Answers

Jul 17, 2026

Uploaded by Theodore

September 2019 ACCA Paper FM Mock C answers provide worked solutions and final selections for multiple financial management topics. The material covers cash flow forecasting with sales growth and collection timing, explanation of economic and transaction exchange rate risk, advanced annuity NPV treatment for payments at the start of the year, valuation using a growing perpetuity free cash flow approach and conversion to equity value per share. It also addresses proxy company de-gearing and relevering for equity beta, currency appreciation/depreciation impacts on import and export prices, overtrading liquidity risk, forward exchange rate calculation, and matching concepts across primary vs secondary markets and dividend policy constraints including scrip dividends.

LanguageEnglish

CategoryExam

FormatPDF

Pages16

Reading Time40 min

AccessFree to download

ACCA Paper FM Financial Management September 2019 Mock C – Answers To gain maximum benefit, do not refer to these answers until you have completed the resit mock questions and submitted them for marking. © Kaplan Financial Limited, 2019 The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials. All rights reserved. No part of this examination may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without prior permission from Kaplan Publishing. SECTION A 1 $227,115 January sales = $200,000 February sales = $200,000 × 1.05 = $210,000 March sales = $210,000 × 1.05 = $220,500 April sales = $220,500 × 1.05 = $231,525 In May, cash received will be 40% of March sales + 60% of April sales = (40% × $220,500) + (60% × $231,525) = $227,115 2 C and E Economic risk, in the exchange rate risk context, is the variation in the value of a business due to unexpected changes in exchange rates. It is the long‐term version of transaction risk which is the risk of exchange rates changing between the date of the transaction and the settlement date. The spot market is one in which you can buy and sell currency now. 3 B In this scenario, payments are made at the start of the year. Treat as an advanced annuity NPV = annuity cash flow × (1 + annuity factor at 10% for 7 years) $52,000 = annuity cash flow × (1 + 4.868) $52,000 / 5.868 = annuity cash flow Annuity cash flow = $8,862 4 THE CORRECT MATCHING IS | The average number of minutes taken to arrive at a fire. | Effectiveness | | --- | --- | | The cost of maintaining the fire equipment. | Economy | | The number of fires attended per member of staff. | Efficiency | 5 C Processing of customer orders would be carried out by the company’s sales function but all the others could be carried out by the factor. 6 C With a growing perpetuity of free cash flows the same principles can be used as with the dividend valuation model (DVM) for a growing perpetuity. In the DVM the present value of a share would be D0(1 + g) / (ke – g) . Here, instead of calculating the present value of the dividends we are calculating the present value of the free cash flows, taking into account the cost of capital and the growth rate. So the PV of the free cash flows is: ($1 .6m × 1.06) / (

Jul 17, 2026

Uploaded by Theodore