Finance and Accounting

at Maastricht University

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++++++ Ask a Finance & Accounting question here and an experienced Success Formula tutor will answer it as soon as possible ++++++ Any problems or questions while studying Finance & Accounting? Don't worry, we got your back! Just post any of your questions in the Finance & Accounting course on Studydrive and our professional tutors will help you. We wish you success! Your Success Formula Team
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I make a lot of mistakes because I mix up, the cost of capital and the equity cost of capital, when they mean "re" or "rwacc" could you give a short explanation? Thank you!
Hi! I have a questions regarding the first sit of this year. In question 29, we are using a 6-month call option, but we are being asked about a one-year put. Using the put-call parity formula, do we have to adjust the risk-free rate from yearly to half-year? Or because the put is for a full year, do we use the year risk-free rate? Thank you! (By the way, as mentioned by the course coordinator all answers here are wrong, but i wanted to know just in case...)
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Thanks uploading this! However, in the course manual it states that we have to use references from the literature that we had to read, not any websites
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ok, is it chapter 7?
It's on​ page 449, chapter 7 PPE and Intangibles
Any complaints for the resit? need them extra point!! help a fellow student out
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Can one of you copy paste their complaints? I don’t know how much detail is needed for this to be taken into account.
I have uploaded three complaints for version R in the discussion. dont know whether it is precise enough, but should be.
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thanks a lot for sharing!!
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Hey :), Difference between the FV and the Market price We hope we could help you :) Your Success Formula Team - Florian
I declare myself officially braindead... thanks for the help, Florian!
Why? can you explain it?
When a company repurchases shares, the stockholders' equity account is debited to reflect the decrease in capitalization and the cash account is credited to reflect the expenditure of cash. For example, if a company repurchased $100,000 of its shares, the Treasury stock account would be debited $100,000 and the cash account would be credited $100,000
Hey :), Initial entry Dr Cr Treasury Shares 100 000 Cash 100 000 When we purchase treasury shares, we only care the market price (Par value is irrelevant). Selling 5000 treasury shares at 15 (However, we purchased them for 10 and thats also their value in our books --> 5000 times 10 = 50 000) Dr Cr Cash 75 000 Treasury Shares 50 000 Paid-in Capital 25 000 Some key points for treasury shares: -Treasury shares are classified as deduction from equity -Treasury shares are recorded at market value on date of purchase (not par value) -A company never records gains or losses on transactions involving its own treasury shares -The difference between amounts received and paid are recorded as paid-in capital Correct answer could be B. We hope we could help you :) Your Success Formula Team - Florian
Could someone help me with that one? Why is it B and not D? (First Sit 2017-2018, version K) Thanks 53. A company issues €15,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2017. Interest is paid on June 30 and December 31. The proceeds from the bonds are €14,703,108. Using effective-interest amortization, how much interest expense will be recognized in 2017? A) €1,170,000 B) €1,176,373 C) €585,000 D) €1,176,249
€14,703,108*(0,08/2) = 588124,32 (= intrerest expense June 30) €15,000,000* (0,078/2)= 585000 588124,32-585000= 3124,32 (amortization) €14,703,108+ 3124,32 (+ since the bonds are at a discount) = 14,70623,32 €14,70623,32 *(0,08/2) = 588249,29 (= intrerest expense Dec 31) 588124,32+588249,29= 1176373,61 Be carefull with rounding etc!
Hey guys :), The right answer is calculated the following way : The two interest expense equal the interest expense for the year 588124,3 + 588249,3 = 1 176 373 We hope we could help you :) Your Success Formula Team - Florian
Could someone explain me why is it 36,400 and not 36,800 (400,000-32,000) ??
You always subtract the allowance balance.
Hey :), Net realizable value with respect to accounts receivable = Gross Receivables (400 000) - Written off (32 000) --> will not be received with 100% certainty - The amount we believe not to collect (4 000) --> 36 000 (starting balance) - 32 00 (write off) = 4000 remaining amount, we expect not to collect (we built that initially as bad debt expense included in the 36 000) --------------------------------------------------------------------- Net realizable value with respect to accounts (364 000) We hope we could help you :) Your Success Formula Team - Florian
Can someone explain why it is 15%? Thanks in advance
1 - (((1-0.35)x(1-0.15)) : (1-0.35)) see trial exam question 10
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Anyone who was able to solve question 53?
I seem to be getting D when I calculate it.... Honestly no clue how to get answer B. If I figure it out, I will let you know. (do you have the answer to Q13?)
Hey guys :), The right answer is calculated the following way : The two interest expense equal the interest expense for the year 588124,3 + 588249,3 = 1 176 373 We hope we could help you :) Your Success Formula Team - Florian
Can somebody explain it?
You take the Equity as 600M (total equity capitalization) and debt is -90M (Cash is negative debt as stated in the book) The calculation follows: 600M (E) / 600M (E) + - 90M (D) becomes: 600/510 = 1.1764... Be is 1.2 as given in the text so you multiply 1.1764... by 1.2 and then you will get 1.41176... So answer B is correct. If you have any further questions, just ask away :) hope this helped you though
Somebody knows?
Can somebody explain me the reasoning behind this? I don't know why they use the 18M that would be if all units were defective, but they only estimate 10,4 would be...
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what about Q29, why are all correct? i got d
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The call option is for 6 months, so you take 1.05/2= 1.025
Can you use the half a year risk free rate, when they are asking for the one-year put? Or do you have to do it automatically because the call option is only for 6 months?
can someone please explain this to me? Why is it not a?
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hope this helps
thank you !
Hey:) I need help with this one. How do I approach questions regarding lower of cost and NRV rule? :P
just calculate selling price - cost to sell ( NRV), 230 in this case and compare it with the cost (170). Choose the lowest one so b)
Hey :), Just like Victoria mentioned: One would have to calculate the NRV and compare it to the cost --> to then report the most accurate number, one would choose the lower number. NRV --> Selling Price - Cost to sell In other words: How much you get for a good minus how much it costs you to sell it As an alternative example: If one would have to value surgical supplies NRV --> 100 - 15 = 85 compared to cost of 90 One would need to value the inventory of surgical supplies at 85 (since it is lower than the current cost). We hope this helps! Your Success Formula Team - Florian
Could someone please explain why this is D? I don't understand the calculation at all. I usually thought we had to calculate it this way: beginning inventory + additional inventory cost (inventory purchased during the year) - ending inventory??
Hey :), Dr Inventory Cr ---------------------------------------------------- 56,000 (Beg Bal) | ??? (COGS) 270 000 (Purchase) | ------------------------------------------------------ EndBal. 66,000 | Cost of Goods Sold: $56,000 + 270,000 − 66,000 = $260 000 Beginning balance + Purchases - Ending Balance = COGS We hope we could help you :) Your Success Formula Team - Florian
Thank you guys, now I get it! :) Those nasty exam formulations...
Could someone explain me briefly how to calculate this? Thanks a lot in advance :)
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It means you discount the FCF still to come so only year 3 . If they would have asked for year 1 you would discount year 2 and 3. Year 0 you would discount 1+2+3. Since you only calculate from year two to three you discount one year= 1,0863^1 the ^1 can be left out since it makes no difference.
Perfect mate. Your help is much appreciated!! :-)
I'm really struggling with bonds, and how we write em down, could someone explain why its c?
Changes in trading securities ARE included in the income statement/ available for sale are NOT. While available for sale securities change shareholders' equity trading securities do not. (
The correct answer is A)536. But I have no clue how to get there, could someone help me?
Calculation: 400-80+60+200+104-148=536 (you subtract the gain on sale of land since this has effected net income but is NOT a operating activity) This site helps!:
Why is b not correct in this case? It says the answer is D, but in the question it says the total amount was credited to deferred. So then why would deferred suddenly only be the 16,200 for the first 4 months?
Deferred (or unearned revenue) are recorded as a liability. 4 months have gone by so now this revenue is now 'earned' so we must subtract 16,200 from this liability. We do this by a debit. In the document I uploaded there is a youtube link for the rules of debit and credit. (it's the 17-18 solved document)
I'm really struggling with this and didn't get any of the right answers, could someone explain how to get to c?
holding gains on available-for-sale securities are not reported on the income statement. Neither are the changes in held-to-maturity. So only calculate the gain from trading securities (change in fair value from one period to the next) Which results in an unrealized gain of 36,000
Could somebody explain me his question? The correct answer is A. I'm struggling with this part of Finance. Thank you!
Put options: higher return with low stock prices: if the stock has a positive beta, the put has a negative beta and a lower expected return on the option. The deeper out-of-the money the put option is, the more negative its beta, and the lower its expected return. Following this logic a stock with a NEGATIVE beta would result in a HIGHER expected return on the put option. Meaning it would have a positive Beta
The correct answer for this question is C apparently, but I feel that it doesn't take the ending inventory into account. Could somebody help me?
They don't tell you the beginning inventory so the nr in ending inventory does not provide any information to the question. They DO tell you that the inventory account increased by 10,000 during the year. Meaning that this part was not sold. Therefor you need to subtract this from the purchases made during the year. SO 270,000- 10,000= 260000. Besides if you want to use the normal COGS formula you can calculate the beginning inventory first by subtracting the 10,0000 from the 66,000= 56000. COGS= Beginventory+Purchases-ending inventory. COGS=56000+270000-66000= 260000
Could somebody explain me/ rephrase the reasoning for this answer, i don't understand it. thank you!
Pre-paid rent has increased from 2015 to 2016 . This means the company had a cash-(out)flow because of this. So it needs to be added to the 19,000. Since that is what they actually paid in cash during the year
Shouldn't you account for 66 month instead of 4 years ?
Yeah I complained about that question, never heard anything about it back. I think it's because of the "full year of depreciation in the year of ritirement " part
Are you stoned?
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Q1 @Jan-Nic, yeah the 450 should be 400
If you find more mistakes, please share! Thank you :)
Hi! I’m prepearing for the resit and i was wondering if somebody could upload the first sit exam corrected. As the answerkey isn’t really explanatory... thank you so much, you woukd be saving me! Happy New Year!
Thank you so so much!
Could somebody tell me which is the difference, between buying the stocks on margins and having a short position (making a short sale?) or is it, just a different way to name the same concept ? Thank you!
Hi! Could somebody tell me which chapters correspond to which tutorial session/week? Thank you so much!!!
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Question 19 of 14.2, why do you calculate with the share price of with instead of without since you want to buy a nr of without shares. Why do you not use the price of without stock ?
Koala Company is currently trading for $47 per share. Koala Company pays no dividends. A 6-month European call option on Koala Company with a strike price of $45 is currently trading for $7.45 per share. The risk-free interest rate is5% per year. The price of a one-year European put option on Koala Company with a strike price of $45 per share is closest to: A)$2.90 per share B)$3.30 per share C)$7.45 per share D)$4.40 per share Why is it 4.40 and not 3.30 ?
I'm currently not in the Netherlands, would someone be willing to hand in my complaints?
Hey guys, weird question, while checking my exam I noticed that I wrote down a different answer for question 50, VERSION U, compared to what is in the exam posted on student portal. I knew the correct answer would be to do nothing and still ended up with answer D. Could it be possible that there is a version mix up? Did anyone else notice the same issue?
I'm counting on everyone to help me raise complaint... the exam was fucked up
Yes I agree
Do you guys have a facebook group or something in which we can share complaints? I'm from a different year and can't seem to find any groups..
Jonathan you damn legend!
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Shouldn't the reasoning for Q30 be " the HOLDER the right..." not the writer? cheers & thanks for your explanations!
It's better to say buyer but holder is just as acceptable
Hey, how do you get to answer d? Thank you in advance :)
Hey, can anybody explain why and how you get to that answer?