TARC ACCA 2005

Tips for paper2.4

Tips form BPP
Paper 2.4 Exam Tips
ACCA Paper 2.4 FMC
December 2004 Exam Tips
Anthony Head is the examiner for FMC and December 2004 will be his fourth exam in that capacity. He has set exams which are fair and focused on the core areas of the syllabus.
The compulsory section A of the exam has focused on investment appraisal or working capital in the past. As Investment appraisal was the main topic of June 2004’s exam it is likely that working capital will come up in December:
Stock management (EOQ and JIT systems)
Cash flow forecasts
How to manage cash surpluses
In section B of the exam there will be two questions on Financial Management (one of which will be on investment appraisal). The other two questions will be on areas from the Management Accounting section of the syllabus.
Net present value (NPV) calculations
Sensitivity analysis
Payback period (PBP) calculations
Differences between NPV and PBP
Performance measurement – Return on investment v Residual income
Throughput accounting (possibly in conjunction with a question on JIT)
Mix and yield variances – calculations and narrative

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Tips from FTC
paper 2.4
compulsory question
long term finance, to incluge gearing ratio and general financial management of a company
choice question
1. budgeting (possibily budgetary control, include forcasting)
2. varriances (essay question)
3. working capital management (especially debtors and stock)
4. investment appriasal; NPV to include tax and possibily asset replacement (equavalent annual cost)

2.4 Financial management and control ( FTMS )

• Investment appraisal: npv and incorporating risk, replacement policy, npv incorporated with stock management
• Working capital management: stock, cash management
• Sources of finance: valuing bond and valuing shares (dividend valuation model), rights
issues, performance measurement (ratio analysis), sources of finance for SME's
• Costing: marginal vs absorption costing, possibly something on pricing methods (cost
plus vs target costing etc)
• Budgeting: flexible budgets, cash budgets, human aspects of budgeting
• Performance measurement: divisional performance measurement, financial vs non
financial measures


2.4 FMC ( Chow Kim Tai)

Question 1

- Investment appraisal and working capital

Question 2 to 5

1. Investment appraisals

-Lease v Buy Decision
-Replacement Policy
-Sensitivity Analysis
-Probabilities(expected value)

2. Working capital management

-Debtor mgt
-Stock mgt
-Cash budgeting

3. Sources of finance

- shares,debentures and derivatives in aspects on methods of issues and valuation methods
- SME financing and EMH (focus on suggesting various sources of finance or comparing 2 different source of finance )

4. Budgetary control

- everything except time series
- might include performance measurement

5. Decision Making

-Pricing Decision,Target costing and life cycle costing and throughput accounting (with limiting factor)

posted by Unknown @ 1:00 AM