[jeff]

Guess I’ll kick it off!

Scheduled to take BEC on 4/19. It’s my last test so I’m putting as much study time in as I can. If I pass I get promoted, if I don’t pass I don’t get promoted, so the pressure is on!!

Good luck to everyone taking BEC this quarter!

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Anonymous]

If you have Q's on Capital Management hit me up. I love this stuff. Becker doesn't even touch ARR, not even a mention of it. I remember it from my intermediate finance class but I might look some stuff up on the internet about actual calculations because I'm a little rusty on that topic. I haven't seen any questions relating to STD DEV on Beckers test bank, but I did see on in that 2013 AICPA released questions, but it was just computing a simple ratio that shouldn't give anyone trouble.

[Anonymous]

Here's a concept that I've seen thrown around in a bunch of MCQ's, but I've never fully understood why it's correct:

Which of the following performance measures may lead a manager of an investment center to forgo investments that could benefit the company as a whole?

a. Return on investment.

b. Residual income.

c. Profitability index.

d. Economic value added.

[Theo]

Hi Guys!

How's it going? Seems like everyone is getting in some good study time.

@Casey Let me give this a shot.

The correct answer is a. Return on investment

Managers would reject the project because the initial effect is an increase in investment (denominator) whereas the numerator would show no initial change because the investment is not yet achieving any returns. So initially the ROI for the investment center would decrease and if a manager's performance is judged based on ROI as a performance measure then the new investment is less desirable.

AUD 01/17/2013 (92)
REG 02/28/2013 (85)
FAR 04/26/2013 (85)
BEC 05/30/2013 (88)

[Anonymous]

It would be A. Return on Investment. The whole problem with ROI is that many managers will be reluctant to increase their investment because this will increase the denominator in the formula thus decreasing their Investment Centers ROI. The whole concept is based on the fact that an assets income producing potential is spread out over its life and thus will decrease your cash flows in the early years and make it appear that your performance is poor.

[Jade CPA-to-be]

here is another one i am having a problem

which one is true?

a. as inflation associated with a foreign economy increases in relation to a domestic economy, deamnd for the foreign currency falls.

b. as inflation associated with a foreign economy increases in relation to a domestic economy, deamnd for the foreign currency increases.

according to what i understand, since inflation, foreign currency value goes down so foreign currency is cheap, so AD should increases since domestic will buy more..

but “a” is correct. can anyone clarify? thanks,

CPA Licensed in California- Class of 2013

[Jade CPA-to-be]

I am basically going over all the questions in becker i got wrong before. Here is another one if someone can help

CPA 06775

which of the following is true regarding productivity ratios?

a. total productivity ratios consider all inputs simultaneously as well as the prices of the inputs

b. partial productivity ratios consider the quality and price of a single input

c. total productivity ratio is calculated as the quantity of output produced in a given period divided by the sales price of outputs during the same period

d. partial productivity ratio is calculated as the quantity of output produced divided by cost of the single input used.

the answer is A

according to becker explanation, TPR = quantity of output / cost of all inputs

PPR = quantity of output / quantity of a single input.

according to becker book B1-30 , TPR = value of all output to the value of all input

PPR = value of all output to the value of major categories of input

these two looks totally different. am i missing anything here?

CPA Licensed in California- Class of 2013

[Anonymous]

Awesome, thanks for the explanation

[Anonymous]

Does anyone know how to use the stupid calculator to do like a ^-4? Like if we had to calculate a PV Annuity factor using 1-(1+r)^r/r? Because I cannot figure out how to do it without just multiplying the number times itself for however many periods?

[Anonymous]

Jade: First question. So the way I think of FC and inflation is explained best by Peter Olinto. So if your economy is experiencing inflation, your currency is now more “expensive” so less people in another country (such as the US) will want your currency. Consequently your demand for your exports will also decrease because they are now “more expensive.” You can think of the example of China. They keep their currency artificially low so that their goods are cheap and they can increase their exports.

Your other question: TPR's consider all inputs and all outputs. If your going to compute your TPR you would use say the quantity of all your outputs/quantity of all your inputs OR you could do the Dollar Value of all outputs/Dollar value of all inputs. See how you must use the Dollar and Dollar and Quantity and Quantity. For PPR's you would only use the Dollar or Quantity of all your outputs/Quantity of ONE input.

[Jade CPA-to-be]

the calculate in becker can not do that

CPA Licensed in California- Class of 2013

[Jade CPA-to-be]

the calculator in becker can not do that

CPA Licensed in California- Class of 2013

[gobias]

Well I'm starting BEC tomorrow and hoping to take it at the end of the month. I won't be doing anything but eat, sleep, and study between now and the 31st so I'm hoping to get through a chapter every 2 days.

F - 86
R - 90
A - 97
B - 91

[Anonymous]

Becker doesn't give the calculation for TPR or PPR in the book. I had to look it up. A quick goolge search produced this little gem: https://smallbusiness.chron.com/calculate-partial-productivity-ratio-12236.html

Its very elementary but it explains the process. All in all when you are calculating your TPR or PPR you just have to make sure that your inputs and outputs are measured the same (i.e., if your inputs are a quantity than your outputs need to be a quantity and conversely if your inputs are dollars your outputs are dollars).

Gobias: I envy you. You'll be alright. I have seen you on other boards! I honestly feel like I want to move my test date up a week because this stuff is really starting to click. I feel as if I wait to long the knowledge will escape. I might have to purchase WTB for extra practice because I am already halfway through round 2 on Becker. We'll have to wait and see.

[Anonymous]

How would a US company hedge against foreign currency exchange fluctuations if they:

1) Are owed X Euro's in 120 Days.

2) Owe X Euro's in 120 days.

[Anonymous]

So the way I think about the hedging is what direction the cash flow is going. A starting point is to understand what options are available (Interest rate swap, Future or Forward, or Call/Put). Usually the forward contracts are easy, you either buy or sell in a forward contract so there's not too much heavy lifting. With a Call/Put it gets a little more confusing. A call option allows you to buy currency at a stated settlement amount within a giving time frame. A call would be used if you had to settle a liability in FC so if you have a A/P you would Buy a call option if you anticipated that your FC was going to go up. Conversely, if you have an A/R your worried about the inflow of the cash so you would want to purchase a Put option because a Put allows you to sell FC at a stated settlement amount within a stated time frame. So thinking logically if your going to receive X dollars of FC and you think the value is going to decrease you would want to sell it with a Put to hedge against the FC X loss. If the FC does not drop below the notional amount of your Put option, you would let it lapse and not exercise it. In conclusion, know what the difference between a Call/Put (Call- you CALL your option to buy FC) and (Put- You exercise your option to Sell FC at a stated amount). Knowing the fundamentals should help you reason through a question on your exam.

[Author]

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