The Examiner's Answers – F1 - Financial Operations Some of the answers that follow are fuller and more comprehensive than would be expected from a well-prepared candidate. They have been written in this way to aid teaching, study and revision for tutors and candidates alike.
SECTION A Answer to Question One 1.1
C
1.2
D
1.3
B
1.4
A
1.5
A
1.6
B
1.7
D
1.8 Total payments = 24x6 = FV Finance cost 6+5+4+3+2+1 = 21 Year 1 = 6/21x38 = 10.9 Year 2 = 5/21x38 = 9.0
144 106 38
Year 1 Year 2
10.9 9.0
106 92.9
(24) (24)
92.9 77.9
Answer therefore B
Financial Operations
1
May 2010