F3 – Financial Strategy September 2012 examination
Examiner’s Answers Question One
Rationale This question begins by testing candidates’ ability to evaluate the working capital requirements of a retail operation and the possible implications of adopting an aggressive strategy for the management of working capital. It then moves on to require an investment appraisal of the proposed retail development on a discounted cash flow basis, incorporating changing working capital requirements and considering sensitivities to changes in key variables and the additional risks of setting up a new business in a foreign country. Question One examines syllabus sections A2 (c), B1(a) and (e), C1(a) and (b).
Financial Strategy
1
September 2012