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Correction:

a. ROCE=Average annual profit

Initial investment100 =

$150,000

$800,000 100 = 18.75%

b. ROCE=Average annual profit

Average investment100 =

$150,000

$450,000 100 = 33.33%

Chapter 10 Page 269

Error:

Step 1. Discount the annuity as usual

200 4yr 5% AF = 200 3.456 = 709.2

Correction:

Step 1. Discount the annuity as usual

200 4yr 5% AF = 200 3.546 = 709.2

Page 274

Error: (Expandable text)

Year 13% 13% 13%

Correction: (Expandable text)

Year 13% 11% 8%

Chapter 11 Page 329

Error:

Time Tax saving

@30%

Timing of tax

relief

$ $

T0 Initial

investment

26,000

T1 WDA @ 25% (6,500) 1,950 T2

Written down

value

19,500

T2 WDA @ 25% (4,875) 1,463 T3

Written down

value

14,625

Sales proceeds (12,500)

Time T0 T1 T2 T3 T4

$ $ $ $ $

Net trading inflows 16,000 16,000 16,000

Tax payable (30%) (4,800) (4,800) (4,800)

Initial investment (26,000)

Scrap proceeds 12,500

Tax relief of WDAs 1,950 1,463 638

Net cash flows (26,000) 16,000 13,150 25,163 4,162

DF @ 8% 1.000 0.926 0.857 0.794 0.735

PV (26,000) 14,816 11,270 19,979

NPV $16,268

8/2/2019 Acca f9 Errata Sheet

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Correction:

Time Tax saving

@30%

Timing of tax

relief

$ $

T0 Initial

investment

26,000

T1 WDA @ 25% (6,500) 1,950 T2

Written down

value

19,500

T2 WDA @ 25% (4,875) 1,463 T3

Written down

value

14,625

T3 Sales proceeds (12,500)

Balancing

allowance

2,125 638 T4

Time T0 T1 T2 T3 T4

$ $ $ $ $

Net trading inflows 16,000 16,000 16,000

Tax payable (30%) (4,800) (4,800) (4,800)

Initial investment (26,000)

Scrap proceeds 12,500

Tax relief of WDAs 1,950 1,463 638

Net cash flows (26,000) 16,000 13,150 25,163 (4,162)

DF @ 8% 1.000 0.926 0.857 0.794 0.735

PV (26,000) 14,816 11,270 19,979 (3,059)NPV $17,006

Chapter 12 Page 365

Error: (TYU answer 1)

(b) (i)

This is a rise of:33

500 100 = 6/6%

Correction: (TYU answer 1)

(b) (i)

This is a rise of:

33

500 100 = 6.6%Page 366Error: (TYU answer 1)

(b) (v)

33

91 100 = 3.6%

Correction: (TYU answer 1)

(b) (v)

33

91 100 = 36%

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Chapter 18 Page 574

Error:

20 +5

6+ 7.5

1

6=17.92%

Correction:

20 7.5

17.92%

Error:

7,500,0008,300,000 20%

800,0008,300,000 7.5% 18.79

Correction:

7,500,0008,300,000

20% + 800,0008,300,000

7.5% =18.79%

Page 587

Error:

NPV=150,000

0.1404 1,150,000= (431,624)

Correction:

NPV=150,000

0.1404 1,500,000 = (431,624)

Page 589

Error:

WACC =7

21.68.71%+ 14.6

21.6 =11.29%Correction:

WACC = 721.6

8.71% + 14.621.6

12.53% = 11.29%Chapter 19 Page 621

Error: (TYU 2)

= 1.6 0.7

0.7 + 0.03 (1 0.30)

Correction: (TYU 2)

= 1.6 0.7

0.7 + 0.3 (1 0.3)

Page 622

Error: (TYU 2)

= Rf(1 t)

= 10% (1 0.30) = 7%

Correction: (TYU 2)

Kd = Rf(1 t)

= 10% (1 0.3) = 7%

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Page 623

Error: (TYU 2 Step 2)

1.23 1.23

0.6818= e

Correction: (TYU 2 Step 2)

1.23 0.88

0.6=

e

e = 1.80

Chapter 22 Page 701

Error/correction:

Here the rates quoted apply to a loan or deposit taken out for a 3 month period.Should be 6 month period.

Chapter 24 Page 763

Error:

(Profit after tax number of shares)

(Total dividends number of shares)

Correction:

(Profit after tax number of shares)

(Total dividends number of shares)

Page 771

Errror:

Current ratio (840/409 and 508/274) 2.67 2.49

Quick ratio (320/409 and 204/274) 1.02 1

Correction:

Current ratio (840/409 and 508/274) 2.05 1.85Quick ratio (320/409 and 204/274) 0.78 0.74