[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

[WANNABE_CPA]

@MOD… thanks understand it now…what is done when tax % is also given?

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[stoleway]

This question wants you to determine the amount at which cash inflow and out flow is equal to 0

The discount rate being used here is 12% so the company will actually breakeven for undertaken any investment that yields 12%

Cash inflow – cash outflow = 0

Use the present value formula

PV factor x after tax cash inflow + PV factor x salvage value – Initial Investment = .0

3.6X + 5700 – 50,000 = 0

3.6X= 44300

X= 12,306

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stamata]

Hi everyone, I'm new here and I just had a general question for everyone taking BEC. I feel comfortable studying for the material as I just finished my undergrad. I started out as an Econ major so the econ stuff came relatively easy to me, and I also minored in finance, which helped a lot with all the finance topics. I felt pretty lucky that I had learned a lot of the material already and didn't study as hard as I did for my first exam… hoping that was not a mistake.

After reading a lot of the exam experiences, I feel really nervous now as I'm seeing a lot of people saying that it's not one to underestimate and that some found it harder than audit (I barely passed audit in July with a 76…). So for people who are finding it difficult, is it because you are learning this material mostly for the first time or does the exam go a lot more in depth than I am thinking?

AUD - 76
BEC - 86
FAR - 78
REG -73, 69, 86! DONE

[M.O.D.]

If there are taxes, they reduce some of the cash flows (income for example), but they reduce expenses too. If there is depreciation, taxes create a “tax shield”, the savings on taxes from deducting deprecation.

Although depreciation is not a cash flow, the resulting tax savings is.

So the overall NPV structure stays the same, but the cash flows change due to the effect of taxes.

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)

[M.O.D.]

Economists often refer to three types of unemployment: “frictional”, “cyclical” and “structural”.

Define each.

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)

[jamie7johnson]

Frictional unemployment is due to the time difference associated with changing jobs. Frictional unemployment tends to be higher when the workforce is younger since young people change jobs often.

Cyclical unemployment is due to fluctuations in the business cycle. At peaks, cyclical unemployment is low. At troughs, it is high.

Structural unemployment occurs when the skills of the workforce do not match the skills that are demanded. This can occur because of technological innovations that displace these workers.

(Seasonal unemployment is due to the demand for certain workers during certain seasons. A water park doesn't need many of its employees in the winter!)

REG - 79
BEC - 80
FAR - 80
AUD - 77

[M.O.D.]

Which components make up the official unemployment released number?

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)

[RandomAlt]

Population

The labor force includes everyone in the population EXCEPT:

-Under 16

-Retired

-Institutionalized

-Active Military

-People not looking for work

…And I realize that wasn't what you were looking for…

Official Unemployment = (Frictional + Structural + Seasonal + Cyclical) / Labor Force

Nature Rate of Unemployment = (Frictional + Structural + Seasonal) / Labor Force

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[RandomAlt]

A company invested in a new machine that will generate revenues of $35,000 annually for seven years. The company will have annual operating expenses of $7,000 on the new machine. Depreciation expense, included in the operating expenses, is $4,000 per year. The expected payback period for the new machine is 5.2 years. What amount did the company pay for the new machine?

A. $145,600

B. $161,200

C. $166,400

D. $182,000

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[raven]

c 166,400

A- pass
F- pass
R- pass
B - August 2014 - pass - YAY!!!!

[RandomAlt]

@raven … Correct, but lets show the calculations on how we got there

Cash flows = $35,000 – (7,000 – 4,000) = $32,000 [Depreciation is a non-cash flow expense]

Payback period = Investment / Annual Cash Flow

or

Annual CF X PBP = Investment

$32,000 x 5.2 = Investment

$166,400 = Investment

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[stoleway]

OK, I just moved my exams from 31st to 24th, I'm getting tired with the BEC material.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[GoVPI]

Im posting this in here from the other thread about people analyzing their testlet difficulty.

According to the AICPA everyone gets a medium testlet on the first one. Then if you do well, it will get harder. If you don't do so hot on the first one, it will go to a medium again. Then the third one is predicted by the second. technically there are no “easy testlets” you have to take peoples experiences and remember its subjective to what they are good at, maybe cost accounting for you, maybe finance for another person. Theres really no telling exactly on this test. Its all over the place, thats one thing we all agree on.

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

[RandomAlt]

@CPAin14 … I've posted this before, so I will be concise here. I honestly don't believe in the predicting if you do well or not by how “hard” the testlets were. My second time at FAR I didn't feel the testlets got harder, and I got an 86.

My reasoning is this. When I was doing the the 2014 AICPA release questions for FAR, which are broken down my medium and hard difficulties, I didn't really see a noticeable difference in the MCQs…what i did notice was that the questions were trickier in the hard section.

Don't go crazy over analyzing you test. Your score is your score and you will find out either way on release day 😉

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[RandomAlt]

Does anyone have some good Equivalent Unit questions to add to the study group, I kind of feel like CPAexcel is lacking with these questions.

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[Author]

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