Question 4a
Examiners Report
Part (a) of question four required candidates to calculate the net present value (NPV) of a project and the sensitivity of the selling price. A sizeable number of candidates made basic errors in the NPV calculation with respect to timing of flows and not being able to calculate the present value of an annuity.
Additionally many candidates were unable to calculate the sensitivity of the selling price. Both these areas are part of the F9 syllabus, as well as the P4 syllabus It was therefore surprising that few candidates got the majority of the marks available for this part.