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Investment Planning AS3001 Assignment

Discussion in 'Financial Planning Study Group' started by 888, 8th Mar, 2011.

  1. 888

    888 Member

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    Hi Guys

    I'm just looking for some help/guidance for question 5 of this assignment.

    With the non-superannuation strategies - did anyone select any stocks for Grace to purchase or did you just recommend managed investments?

    I'm thinking of recommending some equities + a managed fund that exposes her to international equities but I don't know if I'm on the right track - should I just be looking at recommending managed investments??
     
  2. builder2818

    builder2818 Well-Known Member

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    There's no right or wrong answers there, as long as your choice of investments is suitable for her risk profile.

    By stating that you will be advising she purchases more shares will also enable you to provide more information in your answer which question 5 seems to be the one that requires the longest response to.
     
  3. 888

    888 Member

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    Oh that's great thanks for your help with this one :)
     
  4. Kate2011

    Kate2011 Member

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    Hi Guys,

    I'm doing this assignment also - Grace Yeung and I was wondering if for Question 3Cii) the issue price of the advantage health services shares - did anyone else get $4.16??

    Thanks for your help - much appreciated.

    Kate
     
  5. builder2818

    builder2818 Well-Known Member

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    $4.17 - at $3 it is currently underpriced - I have passed the assignment too.
     
  6. Jess126

    Jess126 Member

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    Hi there,

    I was just wondering if anyone has completed Q3 iii).

    If so would you be able to provide me with some help or point me i the right direction of the course notes to find the answer.

    Thanks
     
  7. Jess126

    Jess126 Member

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    Hi there

    I was also just wondering what everyone has used as the first payment amount in question 3a ii

    i have used the following formula but am unsure if it is correct and if i have used the correct amounts:

    PV = $480K+[20,665/(1.075)]+[21,307/(1.075)^2]+[21,862/(1.075)^3]

    any help on these questions is greatly appreciated.

    Thanks
     
  8. Kate2011

    Kate2011 Member

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    Do you mean the IRR one? I'm trying to work on this one at the moment too. It seems there is a lot of confusion about which figures to use in order to calculate this correctly in excel. If anyone has any ideas, please feel free to share.

    Thanks
     
  9. Jess126

    Jess126 Member

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    Thanks Kate2011

    sorry i was meant to say Q3a ii for the PV question. I think once i know i have the correct answer for this i should be able to calculate the IRR. I have calculated the IRR based on the answer i currently have for PV but i dont think this is correct.

    i have not tried to calculate it through excel even though this would probably be the easier way but i have calculated it manually using the examples on page 2:17

    Thanks
     
  10. Christina.Hunt

    Christina.Hunt Member

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    Q3 a ii

    Hi Jess126,

    I am currently doing this assignment too and I have had a lot of confusion with some questions. In regards to your question for Q3ii, I had the same query and the Kaplan technical staff had advised me:

    "Your issue is that you have incorrectly included the purchase price cash flow in the PV calc, but not included the sale price cash flow in the PV calc. The purchase price cash flow should be brought into play when doing the NPC and IRR only."

    Does this make sense? So you need to factor in the sale price of $575,000.

    Hope this helps.

    ----

    I had a quick question about Q3 b iii -
    Have you completed this question yet? It asks for specific performance drivers for suncorp, but I can't seem to find that specific information in the course notes. Is this something we source externally?
    Previously I have been told all the answers for the questions are in the course notes so no external research is required.

    Any help would be greatly appreciated from all.

    Thanks
     
  11. Jess126

    Jess126 Member

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    Hello

    sorry for the late response and thank-you for your response. I have not completed this question as yet however i thought we were only supposed to source this information from the subject notes.

    I might email kaplan and find out if we are to source the information externally.

    thanks
     
  12. Jess126

    Jess126 Member

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    Also just another quick question.

    i have been trying to calculate the IRR and I'm not sure what i am doing incorrectly.

    i have been calculating as follows:

    480,000 = [20665/(1+i)] + [21307/(1+i)^2] + [21862/(1+i)^3]

    i can not calculate a suitable value or i that is results in a figure close enough to $480,000.

    Thanks
     
  13. builder2818

    builder2818 Well-Known Member

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    As usual Kaplan are hopeless at helping you with any of the queries it's students have in particular this question because the markers themselves have no idea also. They don't even realise that they send you email replies that contradict other responses they have given other students or even the same student who asks them to clarify further because what they have provided is utter garbage. No wonder this industry gets a bad name - it's not bad enough they give multiple choice exams but they do not even know their own content themselves.

    Enter these details in excel exactly how they are ignoring the bold text which is merely indicating what cells you need to place the text into. I do not know if it's right but it isn't what I did but I got my question incorrect and I had two responses from the same Kaplan idiot who told me to do two completely different things to correct it and one of his responses was exactly what I did to get it wrong.

    A1 -4800000
    A2 20665
    A3 21307
    A4 =21862+575000
    A5 =IRR(A$1:A$4)

    IRR = 10% but you will never know if this is right or wrong because I believe Kaplan have it wrong to begin with and most students do not even know how or why they are calculating this figure for and if they are REALLY doing it correctly.
     
  14. Christina.Hunt

    Christina.Hunt Member

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    I got 10.4% for my IRR calculating it manually, however that is still $201.11 short of the $480,000. Because Kaplan is asking us to calculate it to one decimal place this is the closest I got.
    It would be much easier not having to provide workings as excel is much easier but if we don't we will lose marks.
     
  15. Christina.Hunt

    Christina.Hunt Member

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    I just cofirmed my manual calculation of 10.4% in excel, make sure you put it to one decimal place as initially it says 10% but at one decimal place it's 10.4%.
     
  16. Christina.Hunt

    Christina.Hunt Member

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    Builder2818, when are you doing your IP1 exam? Mine is on Friday 8.30am
     
  17. builder2818

    builder2818 Well-Known Member

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    I was going to do it this Thursday but I never got round to reading the text again - currently only on Chapter 4 but will do it next week sometime.

    Good luck on Friday.

    Have you finished your assignment?
     
  18. Christina.Hunt

    Christina.Hunt Member

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    Finalising my assignment right now, ended up being due tmoro because of the public holidays.
    I have studied modules 1-8 in a space of 3 days, still have 9 & 10 left and they're the biggest. I don't really have an option to postpone my exam as I'm going overseas next Saturday for 7 weeks.

    Good luck for your exam too! And thanks again for your reply regarding the forecasts.
     
  19. Jess126

    Jess126 Member

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    Hi Christina

    sorry for the late reply. you have probably already submitted your assignment. I just finished this question and basically used performance drivers direct from the company. it wasnt in the course notes. it says to use specific drivers so i cant see how they would mean that it is in the text. i basically used research on the company to find the relevant drivers.

    How did you answer the question? I have to submit it next week as i am going overseas also.

    Thanks also to yourself and builder for the help with the IRR question. When i calculated it manually i got the 10.4% as well. I dont think it matters that it is around $200 out because we only need to get it as close as possible.

    i only have one more question to complete now but can not find it anywhere in the notes. its driving me mad. do you think you could point me in the right direction for Q3 Ciii).

    Thanks again for all your help and goodluck with your exam.
     
  20. Christina.Hunt

    Christina.Hunt Member

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    Hi Jess126,
    I actually never found text in the notes that directly related to this question. I did use text from 9:1.5 Gearing and the share price. This talks about high levels of debt so I just used the info and mentioned the flip side.
    Hope that helps, I'm not sure if I'm right as haven't been marked yet. Builder2818 has passed his assignment so may be able to shed further info on this.

    I'm a bit nervous about my exam tomorrow. Did the practice exam and it's confusing. There's so many elements involved and they all are very similar. Thankfully it's open book, but I find that this sometimes makes it harder cuz you doubt yourself and then go searching in the book, thus wasting time.

    When do you go overseas? I go next Saturday so have very limited time to resit the exam if need be.

    Are you doing the super and retirement subject next? I won't be starting mine til end of June.

    Good luck with your studies.

    Talk soon
    Christina