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NPV Exam Technique SIMPLIFIED | ACCA FM / F9 | Question Darn D13

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  • čas přidán 6. 08. 2024
  • Learn how to easily solve an ACCA NPV (net present value) question. I'll show you how to calculate all the NPV workings that regularly come up in ACCA FM / F9 and get a pass on your upcoming exam. You'll learn spreadsheet exam technique for basic NPV (net present value) & how to use the NPV formula, inflation and compounding inflation rates, Tax, Tax Allowable Depreciation, Working Capital, Real and Nominal Cash Flows and Discount Rates, and Internal Rate of Return (IRR) and the IRR function as a bonus.
    Download question Darn (December 2013), here: www.shorturl.at/lEHJZ
    Good luck on your upcoming ACCA FM / F9 exam!
    ***************************
    Table of contents
    00:00 Introduction
    01:08 Basic NPV working
    04:56 Dealing with residual value
    05:12 Sum function explained
    05:35 NPV function explained
    07:52 Easiest mark in the question
    08:48 Dealing with inflation
    09:13 Nominal discount rate explained
    17:07 Dealing with tax
    18:33 Tax allowable Depreciation
    27:52 Dealing with working capital
    34:21 Real vs Nominal discount rate calculations
    36:41 How to calculate the real discount rate
    38:28 How to calculate IRR and use the IRR function
    **************************
    Steve Willis ACCA
    www.stevewillistraining.com
    How to pass ACCA Exams
    NPV Help
    For more on ACCA FM NPV, check out Open Tuition • Discounted Cash Flows ...
    Find many other helpful videos on James Wright ACCA / jameswrightacca
    More helpful videos from ACCA: • ACCA Student CZcams C...

Komentáře • 43

  • @phillipbanda6815
    @phillipbanda6815 Před 2 lety +5

    Thank you very much Mr. Steve, I passed F9 in December 2021 sitting, your videos really helped me through esp in section C, I am writing PM in March and I continue to watch your videos. God bless you Mr. Steve

    • @SteveWillisACCA
      @SteveWillisACCA  Před 2 lety

      Excellent--I hope they help! I'm sure you can do it :)

  • @rajasekharanchandrasekaran5005

    Great Steve watching this video again &again builds a robust confidence to crack the FM paper with a positive attitude!

  • @JyotiSingh-yw8bd
    @JyotiSingh-yw8bd Před 2 lety +4

    Thankyou Steve. You have covered entire NPV section in this video. This was very helpful 👍

  • @passingtheaccassblexamwith3762

    Clear and systematic. Exactly what a student needs to know to pass. Great job Steve. My compliments.

  • @niranjansoman2609
    @niranjansoman2609 Před 2 lety +3

    Hello sir.
    I just wanted to thank you for uploading such videos.I gave Financial Management paper in december 2021 and passed it it with 74 marks.
    whatever marks I got in the practical questions from last 40 marks were because of your videos. Thank you so much.
    Because what I have experienced is that understanding the concepts is not enough for solving questions on a spreadshit.
    I remeber my paper was on 10th december and till 7th december I hadn't solved a single question of cost of capital and capital structure. I was good with the concepts but zero on practical. I watch your video regarding the cost of capital and within 15 hrs I had solved all the questions of bpp practice kit. Thanks a Lot !

    • @SteveWillisACCA
      @SteveWillisACCA  Před 2 lety +1

      Well done--very impressive score! Glad the videos helped. Good luck on your next exam :)

  • @acca9319
    @acca9319 Před 2 lety +4

    SIR Steve wills , I passed F.M your vidios helpful for passing exam
    Now, please upload P.M related more videos. I am waiting

  • @TheJirator
    @TheJirator Před rokem +1

    Thanks Steve, great vid. It's so much helpful that ACCA should consider making it mandatory part of the syllabus:-)

  • @soniadicker
    @soniadicker Před 5 měsíci +4

    Thank you! I failed my December 2023 exam with a 49%, trying it again this March!

    • @SteveWillisACCA
      @SteveWillisACCA  Před 5 měsíci +1

      You got this!

    • @veluk7820
      @veluk7820 Před 5 měsíci

      Me too

    • @zainazhar3423
      @zainazhar3423 Před 2 měsíci +1

      did you pass in march?

    • @soniadicker
      @soniadicker Před 2 měsíci +1

      @@zainazhar3423 yes 51%

    • @zainazhar3423
      @zainazhar3423 Před 2 měsíci +1

      @@soniadicker Congratulations. Im sitting on 7 june. Is there any specific advice that you wanna share it with me?

  • @akshithap2493
    @akshithap2493 Před 2 lety +4

    thank you for this video! came at the perfect time since i very recently completed this chapter but was a little unsure of myself. i'm excited to binge your videos in prep for the june session :)

  • @rajasekharanchandrasekaran5005

    Great Mr.Steve a very good insight into NPV & IRR with a comprehensive question & solution can face the FM Exam with confidence Thank you!

  • @krishboodhun6442
    @krishboodhun6442 Před 2 lety +1

    Thank you very much! Thanks to you I passed my PM exam in Dec21.

  • @tonykhurtis6163
    @tonykhurtis6163 Před rokem +1

    Love this. Thank you.

  • @umerg0raya
    @umerg0raya Před rokem +1

    Mr Steve you are just Awesome

  • @Happyheartstlc
    @Happyheartstlc Před rokem +2

    Is it necessary to mention outflows in negative in the npv format? Or is okay if I write them as they are and calculate the net CFs as sales-costs-investment later down the rows?

    • @SteveWillisACCA
      @SteveWillisACCA  Před rokem +2

      There is no rule about showing outflows as negatives, I just find it's helpful to do it this way so you can do a sum function at the bottom of the columns and get a net cashflow. Otherwise you'll have to go through every row and add or subtract the figure: more risk of errors.

    • @Happyheartstlc
      @Happyheartstlc Před rokem

      @@SteveWillisACCA thank you so much. Your videos have helped immensely.

    • @SteveWillisACCA
      @SteveWillisACCA  Před rokem +1

      Good to hear :)

  • @techymedia2.0
    @techymedia2.0 Před 2 lety +1

    Sir could you please upload more videos on pm f5 ,especially calculation qns on environmental accounting.

  • @KCWONG-do4db
    @KCWONG-do4db Před 10 měsíci

    Are both tax savings from capital allowance and tax savings from the cost of debt included as cash inflows when calculating NPV ?

    • @SteveWillisACCA
      @SteveWillisACCA  Před 10 měsíci

      Capital allowance: yes. Cost of debt, no--this is included in the after tax cost of debt. If you put the interest payment in the cash flows, and then discount with the after-tax cost of debt in the WACC, you are double counting.

  • @amberwalker3544
    @amberwalker3544 Před 11 měsíci +1

    Hi - can you help please. Do you need to include variable/contribution/fixed costs in the NPV?

    • @SteveWillisACCA
      @SteveWillisACCA  Před 11 měsíci

      only future, incremental cash flows. So if the fixed cost is in the future and related to the project, yes. The cost of the surveyor who checked the land before the project, no. The apportioned salary of the manager who will supervise the project? No.