[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

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

[Anonymous]

@Amanda_88 have you done all the AICPA released questions?

[CJar]

@Peterman25 I think I have the same issue. Have done so many mc that they are starting to run together. Trying to slow down and read each one.

[CJar]

@Peterman, Good Luck tomorrow!

[Anonymous]

@bpk- all of the released questions are included in the WTB and/or Becker so yes. And I've done most of the 2014 Released Questions too.

[Anonymous]

Just finished the 2014 released questions. The medium questions weren't bad but the hard ones were super difficult. I hope they released them because they're bad questions…some of the stuff, like the game theory model, was nowhere in becker or the wiley questions.

[GoVPI]

A piece of cake as in.. Questions you've seen before?

Can you comment on what percentage was calculations and was it more financial or cost accounting.

Thanks. Sounds like you passed.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[JamesBJames]

I think Becker very briefly implied oligopoly game theory when it talked about the kinked demand curve in B5. Oligopolists match competitor price cuts but ignore competitor price increases, which you can model via game theory.

It probably helped, however, that we talked about it in college quite a bit with relation to oligopolies. For example, you can create a 2×2 matrix with two firms and consider two options (reducing prices vs. not changing prices, advertising vs. not advertising, etc.). Game theory can identify a equilibrium that predicts what both firms will rationally choose. Look up the Prisoner's Dilemma for reference. I can't imagine they want more knowledge than that.

FAR: May 1st, 2014 - 91
AUD: May 29th, 2014 - 97!
BEC: July 16th, 2014 - 91
REG: August 29th, 2014 - 88

Licensed December 2015

Feel free to add me on LinkedIn by clicking my username!

[Anonymous]

Hello Everyone. I have tried to post to this forum for awhile now. BEC will be my first exam. I started studying about 6 weeks ago. Scrambling to finish reading (Wiley) and continue the MCQs. I will memorize my formulas and now I am stuck on where they get certain numbers from. Is anyone using WileyVol 1 and Vol 2 for BEC…I am on Module 44 working my way through the Yield to Maturity (YM). Can anyone offer feedback on how they arrived at .6(Price of Bond) .4(Principal Payment)…page 1570?

[Anonymous]

@Amanda_88

Where did you find 2014 released questions, I don't see them on Becker website

Can you provide me a link if possible, thanks =)

[GoVPI]

The questions are a page or two back!

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[M.O.D.]

@ ellen

You have to quote the entire question for us to read it, to answer it.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Anonymous]

here you go!

https://www.cpaexam.com/media/3897071/cpa2904us1_43_online_-_bec.pdf

[Anonymous]

@M.O.D.

Assume the bond has a par value of $1,000 and pays 12% interest, $120 per year for 10 years. The bond is currently selling for $900.

The formula is

YM = (Annual interest payment + Principal payment – Bond price/Number of years to maturity) / 0.6(Price of bond) + 0.4(Principal payment)

Calculation is: ($120 + 1000-900/10) / 0.6($900) + 0.4($1000)

which = 13.8%

My question is where do they get the 0.6 and 0.4 from? Any help you can give is appreciated.

[M.O.D.]

This is a approximation of the formula.

There are others: https://www.financeformulas.net/Yield_to_Maturity.html

What you have is a series of cash flows:

Year 0: -900

Year 1-9: 120 (interest)

Year 10: 1120 (principal + interest)

Solving for IRR, you get 13.91%

This is not really possible to solve without a financial calculator.

I seriously doubt you have to know that formula for the test, but you should understand the cash flows that result from the bond.

The YTM% is the interest rate at which the outgoing cash flow (900 by buying the bond) equals the incoming cash flows, (10 years x $120 (an annuity)), and the principal of 1000 in 10 years (PV equivalent).

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Anonymous]

@ellenrenee, Becker has not had a single question like that as far as I can remember, nor are there any in the 2011 through 2014 AICPA released questions.

[Author]

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