F1 – financial operations - the examiner’s answers - May 2010

Page 1

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


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