http://freeaccastudymaterial.blogspot.com/ co m/ log sp o t l.b tud ACCA Approved Practice & Revision Kit Look inside cc as Paper F9 Financial Management Practice & Revision Kit for exams up to June 2015 Free access to our Exam Success site ea BPP House 142-144 Uxbridge Road London W12 8AA United Kingdom T 0845 075 1100 (UK) T +44 (0)20 8740 2211 (Overseas) E Learningmedia@bpp.com bpp.com/learningmedia For exams up to June 2015 Contact us ym ate • Banks of questions on every syllabus area • Answers with detailed guidance on approaching questions • Three mock exams with full answers and guidance ria One of a suite of products supporting Paper F9 Financial Management, for use independently or as part of a package, this Kit is targeted at ACCA’s exams up to June 2015 and contains: Practice & Revision Kit Paper F9 Financial Management This Kit provides material specifically for the practice and revision stage of your studies for Paper F9 Financial Management that has been comprehensively reviewed by the ACCA examining team This unique review ensures that the questions, solutions and guidance provide the best and most effective resource for practising and revising for the exam Financial Management BPP Learning Media is dedicated to supporting aspiring business professionals with top-quality learning material as they study for demanding professional exams, often whilst working full time BPP Learning Media’s commitment to student success is shown by our record of quality, innovation and market leadership in paper-based and e-learning materials BPP Learning Media’s study materials are written by professionally qualified specialists who know from personal experience the importance of top-quality materials for exam success ACCA F9 ACCA approved content provider ACCA APPROVED CONTENT PROVIDER htt p:/ /fr e June 2014 £18.00 http://freeaccastudymaterial.blogspot.com/ ACF9RK14.indd 1-3 30/05/2014 16:05 co m/ http://freeaccastudymaterial.blogspot.com/ log sp o t P R A C T I C E ria ym ate FINANCIAL MANAGEMENT l.b PAPER F9 tud BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA qualification This means we work closely with the ACCA to ensure our products fully prepare you for your ACCA exams In this ACCA examination team-reviewed Practice and Revision Kit we: Discuss the best strategies for revising and taking your ACCA exams Ensure you are well prepared for your exam Provide you with lots of great guidance on tackling questions Provide you with three mock exams Provide the ACCA examiner's answers as well as our own for selected questions ea cc as htt p:/ /fr e Our Passcard and i-Pass products also support this paper FOR EXAMS TO JUNE 2015 http://freeaccastudymaterial.blogspot.com/ & R E V I S I O N K I T log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ l.b First edition 2007 Eighth edition April 2014 ria ISBN 9781 4727 1106 (previous ISBN 9781 4453 7999 9) ate e-ISBN 9781 4727 1170 All our rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd ym British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated as www.bpp.com/learningmedia tud Published by ea Polestar Wheatons Hennock Road Marsh Barton Exeter EX2 8RP cc Printed in the United Kingdom by htt p:/ /fr e Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable, sustainable sources © BPP Learning Media Ltd 2014 ii http://freeaccastudymaterial.blogspot.com/ Contents co m/ http://freeaccastudymaterial.blogspot.com/ Page Finding questions log sp o t Question index v Topic index ix Helping you with your revision xi Revising F9 l.b Topics to revise xii Question practice xii Passing the F9 exam xiii Exam formulae xvi Exam information xix Useful websites xx Questions and answers ria Questions Answers 77 ate Exam practice Mock exam Questions 221 Plan of attack .231 Answers .232 ym Mock exam Questions 249 Plan of attack .259 Answers .260 tud Mock exam (Specimen paper) Questions 273 Plan of attack .283 Answers .284 as ACCA examiner's answers Specimen paper 299 htt p:/ /fr e ea cc Mathematical tables and formulae 309 Review Form iii http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ A note about copyright Dear Customer What does the little © mean and why does it matter? log sp o t Your market-leading BPP books, course materials and e-learning materials not write and update themselves People write them: on their own behalf or as employees of an organisation that invests in this activity Copyright law protects their livelihoods It does so by creating rights over the use of the content Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media: Photocopying our materials is a breach of copyright Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to Facebook or emailing them to your friends is a breach of copyright l.b You can, of course, sell your books, in the form in which you have bought them – once you have finished with them (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single user licence basis: we not supply ‘unlock’ codes to people who have bought them second-hand htt p:/ /fr e ea cc as tud ym ate ria And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that If they act illegally and unethically in one area, can you really trust them? iv Finding questions http://freeaccastudymaterial.blogspot.com/ Question index The headings in this checklist/index indicate the main topics of questions, but questions often cover several different topics co m/ http://freeaccastudymaterial.blogspot.com/ The exam format is changing for the December 2014 paper The format of old questions has been modified to reflect the new exam structure Page number log sp o t Time Marks allocation Mins Question Answer MCQ bank – Financial management and financial objectives 20 36 77 MCQ bank – Financial management and financial objectives 10 18 78 ABC Co 10 18 78 Bark Co (12/11, amended) 10 18 79 18 80 10 18 81 10 18 82 10 18 10 82 10 18 10 83 10 18 11 84 20 36 12 85 12 MCQ bank – Working capital finance 10 18 13 86 13 JIT 15 27 14 88 10 18 15 89 15 Thorne Co (FMC, 12/05, amended) 15 27 15 90 16 Anjo Co 10 18 16 91 15 27 17 93 18 Special Gift Suppliers (FMC, 12/01, amended) 15 27 17 94 19 Ulnad Co (Specimen paper 2007, amended) 10 18 17 95 20 Danul Co (Specimen paper 2007, amended) 10 18 18 97 21 PKA Co (12/07, amended) 10 18 18 99 22 HGR Co (6/09, amended) 15 27 18 100 23 RGH Co (6/09, amended) 10 18 19 103 24 APX Co (12/09, amended) 15 27 19 104 25 ZSE Co (6/10, amended) 15 27 20 106 26 WQZ Co (12/10, amended) 15 27 21 108 Part B: Financial management environment 10 ria MCQ bank – Financial management environment Tagna (FMC, 6/03, amended) Phoenix 10 MCQ bank – Working capital tud 11 MCQ bank – Managing working capital cc as 14 EOQ /fr e ea 17 Joan Co htt p:/ ym Part C: Working capital management ate MCQ bank – Financial management environment MCQ bank – Financial management environment l.b Part A: Financial management function Finding questions http://freeaccastudymaterial.blogspot.com/ v http://freeaccastudymaterial.blogspot.com/ Page number Marks allocation Mins Question Answer 27 Bold Co (12/11, amended) 10 18 21 109 28 Wobnig Co (6/12, amended) 15 27 22 29 ZPS Co (6/11, amended) 15 27 23 30 KXP Co (12/12, amended) 10 18 23 114 31 PXK Co (12/12, amended) 10 18 24 116 32 Gorwa (2) Co (12/08, amended) 10 18 24 117 36 25 119 36 27 120 36 29 122 18 31 124 20 36 32 125 15 27 34 127 15 27 34 128 10 18 35 130 15 27 35 131 10 18 36 133 15 27 36 134 10 18 37 136 15 27 37 137 15 27 38 139 15 27 38 141 15 27 39 143 49 AGD Co (FMC, 12/05, amended) 15 27 39 145 50 Leaminger Co (FMC, 12/02, amended) 15 27 40 147 51 ASOP Co (12/09, amended) 15 27 41 149 52 Capital rationing 10 18 41 151 15 27 42 152 54 Warden Co (12/11, amended) 15 27 42 154 55 Ridag Co (6/12, amended) 10 18 43 155 56 Gadir Co (6/12, amended) 15 27 43 157 57 BQK Co (12/12, amended) 15 27 44 158 34 MCQ bank – Investment appraisal using DCF 20 35 MCQ bank – Allowing for tax and inflation 20 36 MCQ bank – Project appraisal and risk 10 37 MCQ bank – Specific investment decisions 39 Trecor Co (Specimen paper 2007, amended) 40 Corter Co (Specimen paper 2007, amended) 42 CJ Co (12/10, amended) 43 BRT Co (6/11, amended) 44 Umunat Co (FMC, 12/04, amended) 46 Duo Co (12/07, amended) htt p:/ /fr e ea 53 Filtrex Co cc 48 PV Co (6/09, amended) as 47 SC Co (6/08, amended) tud 45 Tanumu Co (FMC, 12/04, amended) ym 41 OKM Co (6/10, amended) ate 38 Calvic Co 110 112 log sp o t 20 ria 33 MCQ bank – Investment decisions l.b Part D: Investment appraisal vi co m/ Time Finding questions http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Page number Marks allocation Mins Question Answer 58 MCQ bank – Sources of finance 10 18 45 160 59 MCQ bank – Dividend policy 10 18 46 60 MCQ bank – Gearing and capital structure 10 18 47 161 61 MCQ bank – The cost of capital 20 36 48 162 62 MCQ bank – Capital structure 20 36 50 164 63 Tirwen Co (FMC, 12/04, amended) 15 27 51 165 64 Food retailers 15 27 52 167 65 Food retailers 10 18 52 168 66 TFR Co (FMC, 6/07, amended) 15 27 52 169 67 Echo Co (12/07, amended) 10 18 53 171 68 Echo Beach Co (12/07, amended) 15 27 54 173 69 Nugfer Co (12/10, amended) 15 27 55 175 10 18 55 177 10 18 56 178 ate Time 10 18 57 180 15 27 57 181 10 18 58 182 15 27 58 184 76 Droxfol Co (Specimen paper 2007, amended) 15 27 59 185 77 Burse Co (6/08, amended) 10 18 60 188 15 27 60 190 15 27 60 191 15 27 61 193 81 NN Co (12/10, amended) 10 18 62 195 82 NNN Co (12/10, amended) 10 18 62 196 83 AQR Co (6/11, amended) 15 27 63 197 84 Corhig Co (6/12, amended) 15 27 63 199 85 BKB Co (12/12, amended) 15 27 64 201 86 Zigto Co (6/12, amended) 10 18 65 203 71 YNM Co (6/11, amended) 72 Bar Co (12/11, amended) 73 IML Co ym 74 Li Co 79 DD Co (12/09, amended) htt p:/ /fr e ea cc as 80 YGV Co (6/10, amended) tud 75 FAQ 78 Purse Co (6/08, amended) l.b ria 70 Nug Co (12/10, amended) 160 log sp o t Part E: Business finance Finding questions http://freeaccastudymaterial.blogspot.com/ vii http://freeaccastudymaterial.blogspot.com/ Page number Marks allocation Mins Question Answer 87 MCQ bank – Business valuations 20 36 66 204 88 MCQ bank – Market efficiency 10 18 68 205 89 Phobis Co (12/07, amended) 10 18 68 206 90 Close Co (12/11, amended) 10 18 68 207 91 Boluje Co (12/08, amended) 10 18 69 209 36 70 210 18 71 211 18 72 212 18 73 213 18 74 215 log sp o t Part F: Business valuations 20 93 MCQ bank – Interest rate risk 10 94 ZPS Co (6/11, amended) 10 95 Gorwa Co (12/08, amended) 10 ria 92 MCQ bank – Foreign currency risk l.b Part G: Risk management 10 ate 96 Ziggazigto Co (6/12, amended) Mock exam htt p:/ /fr e ea cc as tud Mock exam (Specimen paper) ym Mock exam viii co m/ Time Finding questions http://freeaccastudymaterial.blogspot.com/ Topic index co m/ http://freeaccastudymaterial.blogspot.com/ Listed below are the key Paper F9 syllabus topics and the numbers of the questions in this Kit covering those topics If you need to concentrate your practice and revision on certain topics or if you want to attempt all available questions that refer to a particular subject, you will find this index useful Question numbers Asset replacement decisions 38, 56 Betas 73, 75 Business valuation 90, 91 Mock Q5, Mock Q2 Capital rationing 38, 50, 52, 53 CAPM 73, 75, 78, 84 Cash management 15, 19, 22, 28, 31, 52 Cash operating cycle 16, 27, Mock Q1 Dividend policy 65, 67, 71, 79, 81, Mock Q5 Exchange rate risk 94, 96, Mock Q2, Mock Q3 Financial intermediaries Gearing 67, 69, 80 Interest rates 8, 70, 95, Mock Q3 Inventory management 13, 14, 21, Mock Q1 ate ria l.b log sp o t Syllabus topic IRR 40, 46, 47, 48, Mock Q4 Islamic finance Mock Q3 49, 50, 51, 68, Mock Q2 ym Leasing NPV 38, 41, 42, 43, 46, 47, 48, 51, 54, 55, 56, Mock Q4, Mock Q4 4, tud Objectives Overtrading Payables management Payback as Pecking order 28, 32, 69 29, 30, Mock Q1 44, 48 91 75 Ratio analysis 3, 16, 28, 32, 63, 64, 66, 71, 80 cc Project-specific discount rate 17, 18, 19, 20, 26, 30, 31, Mock Q1 Rights issue 63, 68, 72, Mock Q3 ea Receivables management 23, 25, 44, 45 Sensitivity analysis 45, 54, 56 Shareholder wealth maximisation 48, 71 Sources of finance 65, 66, 68, 69, 86, Mock Q2 Stock market efficiency 70, 89 Total shareholder return htt p:/ /fr e Risk and uncertainty Value for money 4, Finding questions http://freeaccastudymaterial.blogspot.com/ ix htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 302 Examiner’s answers: Specimen paper http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Examiner’s answers: Specimen paper http://freeaccastudymaterial.blogspot.com/ 303 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 304 Examiner’s answers: Specimen paper http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Examiner’s answers: Specimen paper http://freeaccastudymaterial.blogspot.com/ 305 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 306 Examiner’s answers: Specimen paper http://freeaccastudymaterial.blogspot.com/ ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud Mathematical tables 307 http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 308 http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Mathematical tables http://freeaccastudymaterial.blogspot.com/ 309 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 310 Mathematical tables http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Mathematical tables http://freeaccastudymaterial.blogspot.com/ 311 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 312 Mathematical tables http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ Name: co m/ Review Form – Paper F9 Financial Management (06/14) Address: During the past six months you recall seeing/receiving any of the 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(Tick as many boxes as are relevant) log sp o t How have you used this Kit? (Tick one box only) Home study (book only) On a course: college Our advertisement in Student Accountant With 'correspondence' package Our advertisement in Pass Other Our advertisement in PQ Our brochure with a letter through the post Why did you decide to purchase this Kit? (Tick one box only) Our website www.bpp.com Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) Have used the complementary Study text Have used other BPP products in the past l.b Recommendation by friend/colleague Prices and publication dates of new editions Information on product content Saw advertising Facility to order books off-the-page Other None of the above Passcards Kit i-Pass ym Which BPP products have you used? Text ate ria Recommendation by a lecturer at college Home Study Package Your ratings, comments and suggestions would be appreciated on the following areas Questions Top Tips etc in answers Content and structure of answers cc Overall opinion of this Kit as Mock exam answers Very useful Useful Not useful Good Adequate Poor Yes No tud Passing F9 Excellent Do you intend to continue using BPP products? ea The BPP author of this edition can be e-mailed at: heatherfreer@bpp.com htt p:/ /fr e Please return this form to: Pippa Riley, ACCA Range Manager, BPP Learning Media Ltd, FREEPOST, London, W12 8AA http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Review Form (continued) TELL US WHAT YOU THINK htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t Please note any further comments and suggestions/errors below http://freeaccastudymaterial.blogspot.com/ ... coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA- approved support for your revision We look at the dos and don’ts of revising for, and taking, ACCA exams We... This means we work closely with the ACCA to ensure our products fully prepare you for your ACCA exams In this ACCA examination team-reviewed Practice and Revision Kit we: Discuss the best strategies... http://freeaccastudymaterial.blogspot.com/ co m/ http://freeaccastudymaterial.blogspot.com/ Helping you with your revision BPP Learning Media – Approved Learning Partner - content Tackling revision