[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for BEC.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[Anonymous]

The q regarding the MPS can be twisted and they can ask for the multiplier effect factor. In that case is 4 (80/20). I reached at the .25 at first by dividing 1/4 (same thing as 20/80). The way I know that the .25 is the MPS and that it can never be less than MPC in the current economy is bc of the multiplier effect. In theory in your mcq for each additional dollar spent by the goverment there is 75% additional income added to the equilibrium GDP since only 25% are saved by each increase in income or 20 * multiplier effect factor of 4 = 80.

Is the answer C? 23% premium?

[monikernc]

farwars. the gdp multpiler = 1/(1-MPC), the solution is 80/20=4 is the multiplier. 1/(1-MPC)=4 and solve for MPC. 1/(1-.75)=4. MPC = .75 and MPS = .25. and yes, we consume more than we save

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[FAR_WARS]

a. is correct.

(1.367 fwd rate – $1.364 spot rate / $1.364 spot rate) * (12months /3 months) = 0.88% premium

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Anonymous]

Ugh I forgot to include the months

[MaLoTu]

I truly hope the handful of formulas I can remember will be enough to get a pass =( The more questions you guys post the more I realize I don't know/forgot!

[monikernc]

((1.367/1.364)-1)*(360/90)=.88% i should add it is a premium because the result is positive.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[FAR_WARS]

Net operating profit before taxes_$31,250,000
Inventory____________________5,000,000
Long-term debt______________40,000,000
Depreciation expense__________9,000,000
Change in net working capital____5,000,000
Capital expenditures___________8,000,000
Invested capital (net assets)____80,000,000
Weighted average cost of capital ___ 10%
Tax rate _______________________20%

Which of the following measures the amount of free cash flow for Walkin Corporation for the year?
a. $7,000,000
b. $8,000,000
c. $21,000,000
d. $25,000,000

FAR- 80
BEC- 75
AUD- 78
REG- ?

[payaza2000]

Is it C?

EBIT* (1-T)+ Depreciation- Capital Expenditures- Change in WC

And I totally hate the Foreign Exchange Problems, I also forgot the months.

FAR 5/6/2015- 84
REG 8/3/2015 - 87
AUD 10/25/2015- 69 1/20/2016 -75
BEC 2/26/2016- 80

Thank you God

[FAR_WARS]

yes C is correct

Ebit
-tax expense
+depreciation
-capital expenditures
-chg wc
= Free CF

FAR- 80
BEC- 75
AUD- 78
REG- ?

[monikernc]

That was a good one on the free cash flows – i had forgotten it. Thanks for memory jolt. Keep them coming.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[monikernc]

A scattergraph is constructed for a certain mixed cost. The total cost observed at 2,000 machine hours is $16,000. The regression line intersects the cost axis at $8,000. What is the variable cost per machine hour for this mixed cost?

A. $2.00
B. $3.00
C. $4.00
D. $8.00

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[FAR_WARS]

Is this even possible to solve if no PV values are given in the problem? I'm assuming it is a mistake in Wiley Book (or I am totally blind)

Bennet Inc. uses the net present value method to evaluate capital projects. Bennet's required rate of return is 10%. Bennet is considering two mutually exclusive projects for its manufacturing business. Both projects require an initial outlay of $120,000 and are expected to have a useful life of four years. The projected after-tax cash flows associated with these projects are as follows:

Year; Project X; Project Y
—1—–$40,000—$10,000
—2——40,000—–20,000
—3——40,000—–60,000
—4——40,000—–80,000
Total–$160,000–$170,000

Assuming adequate funds are available, which of the
following project options would you recommend that Bennet's management undertake?

a. Project X only.
b. Project Y only.
c. Projects X and Y.
d. Neither project.

(a) The requirement is to determine which mutually
exclusive investment should be accepted. Answer (a) is
correct because Project X has the higher net present value as calculated below.

Net present value of Project X = $6,800 = ($40,000 × 3.170) – $120,000

Net present value of Project Y = $5,310 = [($10,000 × 0.909) + ($20,000 × 0.826) + ($60,000 × 0.751)
+ ($80,000 × 0.683)] – $120,000

FAR- 80
BEC- 75
AUD- 78
REG- ?

[FAR_WARS]

@monikernc

16= m(2) + 8
m= 4

c?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[monikernc]

Farwars, you win a beautiful almost new car!

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Anonymous]

Man I hope I do not have to do the PV and PV of annuities formulas on the exam.

[Author]

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