100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary ACCA FINANCIAL MANAGEMENT F9 ALL FORMULAS AND COST OF EQUITY NOTES $7.78   Add to cart

Summary

Summary ACCA FINANCIAL MANAGEMENT F9 ALL FORMULAS AND COST OF EQUITY NOTES

 204 views  2 purchases
  • Course
  • Institution
  • Book

This document contains all formulas required for ACCA F9 FINANCIAL MANAGEMENT paper. cost of equity, investment appraisal, weighted average cost of finance, all complex topics are covered and explained. all formulas compiled in one place.

Preview 3 out of 21  pages

  • Yes
  • January 10, 2023
  • 21
  • 2022/2023
  • Summary
avatar-seller
Investment Appraisal
Saturday, March 26, 2022 6:51 PM




Accounting Rate of Return




IRR or DCF yield; Break-even cost of capital. Project to be accepted if IRR is greater than
the cost of capital.




PV of perpetuity = CF/r


Nominal cash flows (the actual expected cash flows at future prices, ie including inflationary increases)
should be discounted at a nominal discount rate, which is a rate relating to current market rates of
return. Real cash flows (cash flows in current prices) should be discounted at a real discount rate, which
is based on a nominal cost of capital that has been deflated by the general rate of inflation.
Perpetuity X


Discounted Payback



Consistent Cashflows


Effect of inflation and taxation in investment appraisal

FM F9 Page 1

,Effect of inflation and taxation in investment appraisal

Tax rate x Capital allowance = Tax Savings


Compound formula




FM F9 Page 2

, Capital Rationing

Project
Project Investment Cost PV CFs NPV Profitability Ratio Ranking NPV Ranking Profitability

Profitability Ratio = PV CFs/ Investment Cost
Project NPV at Year 1 NPV in Year 0 Value Loss in NPV

NPV in Year 0 Value = NPV at Year 1 x 0.909

Project Loss in NPV Investment Value Postponeability Index

Postponability Index = Loss in NPV/ Investment Value

After Tax Borrowing rate = Cost of Capital x (1-T)
Balancing Charge = Scrap Value x Tax Rate

Balancing Allowance = Purchase Value - Scrap Value - Cumulative Depreciation Allowances

Tax Savings on Lease = Tax Rate x Lease Payment




FM F9 Page 3

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller dopeaf. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.78. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

76747 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$7.78  2x  sold
  • (0)
  Add to cart