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# CAP 2 SFMA ASSESSMENT 2010

• Closed Accounts Posts: 49 ✭✭✭

jhn_noln wrote: »
I am with the 76000 people on this one too! The way to look at it is (this is explained very well in the Drury books if anyone gets a chance to look at them) that the €150/hour contribution is after taking away labour cost of €40 euro also!

Therefore the total lost contribution is €190 per hour (as you should disregard labour as it will be used either way) and thus 190*400 = 76000

What confuses many is the other way to calculate it by using the 150*400 = 60000 and then add back the labour of 16000. This method is basically a shortcut and doesnt explain what you are doing.

Again the drury books explain it very well imo!

Hiya,
Could you please tell me in what section it is explained in Druary?

Thanks,
Rums08

• Closed Accounts Posts: 49 ✭✭✭

Guys,
I read something on Page 331 in Druary which says that the relevant labour cost when labour is being switched from one contract to another (similar to our case) is hourly labour rate plus an opportunity cost consisting of the contribution per hour that is lost by accepting the order.

So I guess €76,000 is the right figure to go with. And in doing so, I get a profit of €4K. I think I will go ahead with this and also quote this extract from Druary as backup.

What do yous think?

• Registered Users Posts: 58 ✭✭✭

BlackHouse wrote: »
its up there now I think, would appreciate any commetns

in your rights issue tab of ur wacc excel spreedsheet why are you using dividend of 150000000 for 2009.should it not be 125000000

• Closed Accounts Posts: 3

What are ppl recommending for the source of finance? I think i'm gonna go debentures, wacc is low but liquidity risk is high....its hardly the best time to issue new equity, but maybe the rights issue could be a contender too

• Closed Accounts Posts: 91 ✭✭✭

rums08 wrote: »
Guys,
I read something on Page 331 in Druary which says that the relevant labour cost when labour is being switched from one contract to another (similar to our case) is hourly labour rate plus an opportunity cost consisting of the contribution per hour that is lost by accepting the order.

So I guess €76,000 is the right figure to go with. And in doing so, I get a profit of €4K. I think I will go ahead with this and also quote this extract from Druary as backup.

What do yous think?

Sorry i dont have this book whats the quote re the 5000 mat fg??

i agree wit 76000

• Closed Accounts Posts: 11 ✭✭✭

I'm going with Scenario three, lower gearing hence lower financial risk, 336 million earnings from it and if existing shareholders buy shares than control is entact. Debentures have high financial risk and gearing.

I don't think they are trying to catch us out with the material FG, i think its still the 25,000 therefore breaking even or loss of 16,000

• Closed Accounts Posts: 2

What are ppl recommending for the source of finance? I think i'm gonna go debentures, wacc is low but liquidity risk is high....its hardly the best time to issue new equity, but maybe the rights issue could be a contender too

I've also mentioned that it has the most favourable impact on EPS, provided it doesn't introduce an unacceptable level of gearing...

• Closed Accounts Posts: 2

What are the thoughts on the aquisition of Rian Inc?
I was going along the lines of documents supporting an aquisition... qualitiative factors of trading in China... Market developemtn vs Product devel...
wd appreciate an opinion

• Closed Accounts Posts: 451 ✭✭

Does anyone reckon they will not be under pressure for time? My notes are organised. dunno what to do now

• Closed Accounts Posts: 44 ✭✭✭

The very best of luck to everyone tomorrow. Hope it goes well for everyone.........

• Closed Accounts Posts: 91 ✭✭✭

GordeyOlya wrote: »
What are the thoughts on the aquisition of Rian Inc?
I was going along the lines of documents supporting an aquisition... qualitiative factors of trading in China... Market developemtn vs Product devel...
wd appreciate an opinion

Im well against it

• Closed Accounts Posts: 3

GordeyOlya wrote: »
What are the thoughts on the aquisition of Rian Inc?
I was going along the lines of documents supporting an aquisition... qualitiative factors of trading in China... Market developemtn vs Product devel...
wd appreciate an opinion

Think there could be a q about hedging translation/interest rate exposure,

I've got some theory prepared for that, plus more general stuff about acquistions, geographic development etc

• Registered Users Posts: 8 ✭✭✭

in your rights issue tab of ur wacc excel spreedsheet why are you using dividend of 150000000 for 2009.should it not be 125000000

That was what he/she originally used, but he has an another post where he revised his wacc figure and it seems he went with the 125k figure

• Registered Users Posts: 8 ✭✭✭

BlackHouse wrote: »
Just to let you know I am chnaging back to the unadjusted div method.
I hvae seen a tutorial from with the figures left the same, my Wacc's are now Scn 2 - 17.85ke, wacc 15.258, Scn 3 - 17.75ke, wacc 15.218

Here it is

• Closed Accounts Posts: 451 ✭✭

On a more important note, whats the story with parking.
Is the BT young geek exhibtion still on??

• Closed Accounts Posts: 44 ✭✭✭

I have something on advantages and disadvantages for product development but cannot find anything on advatanges and disadvantages of market development...

Any one got any ideas??

• Registered Users Posts: 58 ✭✭✭

BlackHouse wrote: »
Yeah I agree now, the 16k should be in there according to the book.

Do you mind posting your WACC calc's? Also are you focusing much on the due dillegence? I think they feb 1st dealdine poses a significant risk s they only have 3 months at ost contact with the target company and its 100% cash move.

BLACKHOUSE!
WHAT IS THE FINAL FIGURE YOU ARE GOING FOR WITH THE PROJECT AND WHAT U PUTTING IN FOR

UNSKILLED LABOUR
VARIABLE O/H'S

• Registered Users Posts: 3

seven-iron wrote: »
On a more important note, whats the story with parking.
Is the BT young geek exhibtion still on??

Rather than our slightly older geek examination? :rolleyes:

Parking is a pain if you're in a car. Arrive in plenty of time. Gluck tomorrow everyone. Not everyone is going to have the same answer for everything, but if you explain your rationale, and it makes sense, then they can't fault you. There's no doubt about it, there are some vague parts in it, but they want you to make a call on these things.

Just want to say this thread was a great help. Fair play to everyone who contributed.

See y'all on the other side! :eek:

• Closed Accounts Posts: 11 ✭✭✭

best of luck everyone. sure it will be alright on the night!

• Closed Accounts Posts: 451 ✭✭

Parking is a pain if you're in a car.

Not in a car in a helicopter

• Registered Users Posts: 2,543

Lovely paper, the high marks for the WACC calculation and the relevant costing calculation pretty much ensured a pass for everyone.

Theory was nice enough too except for maybe the wacc theory question, not what I had expected/prepared

• Registered Users Posts: 954 ✭✭✭

yeah can't argue with the calculations. wacc theory was unexpected and not answered too well on my part! and the translation risk was fair even if i did leave it til last and run out of time but overall a decent paper.

even though i contributed nothing to this thread, i'd like to thank everyone on it as it helped be big time this week! perhaps one for the audit assessment could be in order if it would help or if there's anything to discuss on it in the weeks leading up to it.

• Registered Users Posts: 601

It was grand. Thank you for your help. Def wouldnt have done so well if it hadnt been for this thread.