Singapore CA Qualification (Foundation) Examination - Financial Management - 5 December 2022

Sep 26, 2026

Uploaded by Oliver

Singapore CA Qualification (Foundation) Examination paper on Financial Management dated 5 December 2022. Provides examination instructions covering time limit, open-book restrictions, permitted materials, allowed computer and calculator use, monitoring and integrity recording, and prohibited devices. Includes module-specific rules on currency treatment and contains Question 1 scenario for Zenspring Sleep Systems with sales, costs, inflation uncertainty, tax, working capital, and capital budgeting calculations, plus Question 2 scenario beginning with LuxGreen Yachts’ investment decision and cash flow considerations.

LanguageEnglish

CategoryExam

FormatPDF

Pages20

Reading Time50 min

AccessFree to download

Instructions to Candidates

Module-Specific Instructions

Question 1 (Zenspring Sleep Systems)

(a) Nominal cost of capital

(b) Nominal cashflows

(d) Payback period

(e) Recommendation and justification

(f) NPV sensitivity to initial investment

Question 2 (LuxGreen Yachts Ltd)

Singapore CA Qualification (Foundation) Examination 5 December 2022 Financial Management INSTRUCTIONS TO CANDIDATES: 1. The time allowed for this examination paper is 3 hours 15 minutes. 2. This examination paper has FOUR (4) questions and comprises TWENTY (20) pages (including this instruction sheet, Appendix A and Appendix B) . Each question may have MULTIPLE parts and ALL questions are examinable. 3. This is a restricted open book examination. You are allowed to have only the following materials with you at your exam location: • One A4-sized double-sided cheat sheet • One A4-sized double-sided blank scratch paper 4. During the examination, you are allowed to use your laptop and any calculators that comply with the SAC’s regulations. Please note that watches, mobile phones, tablets, and all other electronic devices MUST NOT be used during the examination. 5. During the examination, videos of you and your computer screen will be recorded for the purpose of ensuring examination integrity and you have consented to these recordings. 6. This examination paper and all video recordings of this exam are the property of the Singapore Accountancy Commission. MODULE-SPECIFIC INSTRUCTIONS: 7. Assume that all dollar amounts are in Singapore dollar (S$) unless otherwise stated. IMPORTANT NOTICE: If you are not feeling well, please do not press “Start Assessment”. If you have started and leave during the exam, you would be deemed to have attempted the paper. e-Exam Question Number 1 **VERY IMPORTANT NOTICE** 1. Your question paper is attached under the "Resource" tab found at the bottom right of EACH question. Other important information: 2. You will only be allowed to access the Excel function from your computer. 3. You are NOT ALLOWED to access any websites or reference materials (except for your A4 sized double sided cheat sheet) during the exam. 4. You are NOT ALLOWED to print the question paper. 5. Please take note that your screen will be monitored throughout the examination. If you are found to have accessed unauthorised materials or websites, or if you cheat or attempt to cheat, you will be liable to severe disciplinary action. Should you encounter any issues during the exam, please call the following number: +65 6100 0516 6. You do not need to fill in an answer for this question. Question 1 –(a) to (f) Zenspring Sleep Systems (ZSS) manufactures comprehensive ‘sleep systems’ that includes mattresses, pillows, bed frames, bed sheets and smart electronic monitoring equipment. It is a for-profit business that aims to maximise shareholder wealth. ZSS is planning to launch a new mattress based on an innovative spring-like material with a superior blend of support and comfort. The Board is currently appraising the investment. The Finance Director has prepared the following ‘working assumptions’ to be used: • Sales will be 10,000 in year 1, 25,000 in year 2, 18,000 in year 3 and 5,000 in year 4. The price in year 1 will be $750 increasing by general inflation thereafter. • Manufacturing and distribution costs will be $400 per mattress in year 1, increasing by 8% per year in nominal or money terms. • General inflation is uncertain. There is a 75% chance it could be 6% per year, anda 25% chance it could be 2% per year. • Initial investment will be $18 million on 1 January 20X3, with $1 million scrap proceeds (in money terms) expected on the last day of year 4. • Due to government assistance relating to research and development associated with the new mattress, corporate income tax is payable on net operating income ata special rate of 7% at the end of the year to which the cashflows relate for the duration of the project. The initial investment is not eligible for capital allowances. • Working capital equal to 10% of revenues for any one year is required to be in place at the start of that year. All working capital will be released at the end of the project. • Sales

FAQs

What materials and devices are allowed during this exam?

Students may use one A4 double-sided cheat sheet and one A4 double-sided blank scratch paper. Laptop use and compliant calculators are allowed, while mobile phones, tablets, and other electronic devices are not allowed.

How are dollar amounts treated in the module-specific instructions?

All dollar amounts are assumed to be in Singapore dollars (S$) unless otherwise stated.

What does Question 1 require the candidate to compute?

Question 1 requires calculations of nominal cost of capital, relevant nominal cashflows, Net Present Value, payback period, recommendation of which approach is more suitable, and NPV sensitivity to the size of the initial investment.

Sep 26, 2026

Uploaded by Oliver