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    BSAS 2014 Practice Exam Addendum: Level I: Afternoon Session Level II: Morning Session Item Set 5

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    mdorneanu
    This document provides clarifications and corrections to answers on the BSAS 2014 Practice Exam. It addresses questions from Levels I-III of both the morning and afternoon sessions. For each level and session, it lists the question number, original answer, and any clarification or correction to the original response. The clarifications relate to additional details or corrections in calculations that affect the answers.

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    BSAS 2014 Practice Exam Addendum: Level I: Afternoon Session Level II: Morning Session Item Set 5

    Uploaded by

    mdorneanu
    25 views1 page
    This document provides clarifications and corrections to answers on the BSAS 2014 Practice Exam. It addresses questions from Levels I-III of both the morning and afternoon sessions. For each level and session, it lists the question number, original answer, and any clarification or correction to the original response. The clarifications relate to additional details or corrections in calculations that affect the answers.

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    BSAS Errata

    Original Title

    s 14 Pe Addendum

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    This document provides clarifications and corrections to answers on the BSAS 2014 Practice Exam. It addresses questions from Levels I-III of both the morning and afternoon sessions. For each level and session, it lists the question number, original answer, and any clarification or correction to the original response. The clarifications relate to additional details or corrections in calculations that affect the answers.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views1 page

    BSAS 2014 Practice Exam Addendum: Level I: Afternoon Session Level II: Morning Session Item Set 5

    Uploaded by

    mdorneanu
    This document provides clarifications and corrections to answers on the BSAS 2014 Practice Exam. It addresses questions from Levels I-III of both the morning and afternoon sessions. For each level and session, it lists the question number, original answer, and any clarification or correction to the original response. The clarifications relate to additional details or corrections in calculations that affect the answers.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    BSAS 2014 Practice Exam Addendum

    Thank you for your comments and questions. All submitted comments were reviewed and considered by our
    exam coordinator and team of level coordinators. Only questions that were incorrect or needed further
    clarification are included on this addendum.

    Level I: Afternoon Session


    Answer 119. C. List of assets to be included in the portfolio.

    Level II: Morning Session


    Item Set 5
    Answer 27. C. Answer remains the same. Clarification: With an upward revision of $1,500,000 for the
    building cost, the building book value at the end of year 5 will be $1,125,000 higher ( an increase
    from $15,000,000 to $16,125,000). This will reduce the capital gains tax by $450,000 =
    $1,125,000 x 0.40. In present value term, this is a saving of $393,138. Thus, the NPV will
    decrease by $1,386,276 - $393,138 = $993,138.
    Item Set 6
    Answer 35. B. Answer remains the same. Clarification: In Cost of Equity calculation, beta should be 1.3 not
    1.4. WACC = 8.78%

    Level II: Afternoon Session


    Item Set 3
    Question 16. C. Answer remains the same. In the question, Siegfried Stores follows US GAAP and change LIFO
    from “least likely to have” to “most likely to have.”
    Item Set 5
    Answer 26. Value of Combined Firm = $6,020. (4,500 + 1,400 + 120)

    Level III: Morning Session


    Answer 1C. Answers are as follows: Trader, Active, Passive.
    Answer 2A. Next retirement payment = £150,000 x 1.025 = £153,750. Answer remains the same.

    Level III: Afternoon Session


    Answer 34. Replace “most likely incorrect” with “most likely correct”
    Answer 45. C. $80 + $85
    (1.0115) (1.0175)^2 = $82.450
    Answer 51. Both B and C are incorrect statements, allowing for two correct answers.

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