Sensitivity & probability analysis

[Tia]

Method of applying sensitivity analysis: Quantify the change in each key variable that will make NPV zero

Method of applying profitability analysis: Prepare a profitability distribution using different or joint probabilities

[Siro]

This topic did come up in the q2 of investment appraisal today was a discursive part though involving the implementation of sensitivity analysis and probability to assess risk and was worth 8 marks!

[Tia]

Glad to be of some assistance!!

Will definitely try to put in more detailed posts the next time.

On another note, how was the paper? Was anything unexpected? How did you fare?

Pritika

[Siro]

Well I was not prepared well to be honest just did not study a word but overall the paper in my opinion was easy discursive portion of the paper amounted to 32 marks or more were allocated to it and surprisingly only 7 marks were tested for the Foreign exchange risk section. WACC came up in the investment appraisal question was to be calculated and then used as the discount factor and business valuation came up in question 1 worth 11 marks P/E based valuation and dividend based.
Stock market efficiency,EOQ,Conversion premium,valuation of proposals of sources of finance and its evaluation was part of the paper too.I do think I will appear next time though because it went very bad but I knew it before hand so no regrets!

[Tia]

Things like this do happen. Hope for the best and put in better efforts the next time round.

[Siro]

Yes I do realise it and will give in my 100% effort next time need to finish part 2 in the next attempt hopefully if I pass F8 this attempt.