Will we need to draw any ......

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
... of these graphs for tomorrow's ECR ?<BR><BR>You know the Break even, Profit/Volume Charts, Contribution Break Even Charts. <BR><BR>Hope not !!<BR><BR>Mick

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    Possibly break even charts, knowing what is sale revenue, total cost, variable cost, fixed cost and margin of safety line.<BR><BR>IRR chart as well.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    OK, My anxiety level has just raised tenfold!! I understood that we wd be expected to be able to read them and understand them, but not have to create them as it was too extensive timewise to a, produce & b, assess such a small portion of the exam.<BR><BR>Pls tell me I am right????????
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    We have been told we are not required to draw them just understand them.<BR><BR>It actually states in one of our text books that we won't have to draw them, BBP book I think, and our tutor has also stated this as well.<BR><BR>Also the BPP text book doesn't even show the IRR graph.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    Normally you would be asked to identify chart lines more than anything.<BR><BR>One exam that I did just asked you to know what line is where. <BR><BR><BR>As for IRR graph, it may or may not come up, there is some speculation whether it will or not due to new formatting of exam by new examiner. Best to know briefly how it works.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    sorry if this sounds silly but what is an IRR graph???
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    I imagine if you have to draw anything, it'll just be a matter of putting the lines on the graph.<BR><BR>In that, they'll have the axis drawn for you and you just stick the points on and draw the line.<BR><BR>The IRR graph is quite straight forward TBH, you know the NPV is going to end at 0 so you draw it to there from the end NPV as per discounted cash flow method.<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    Nice one guys - thanks for some good info there and good luck tomorrow.<BR><BR>Mick
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Will we need to draw any ......

    The graph is quite straight forward. You would be given a positive NPV at 10% and a negative NPV at 20%. You then draw a straight line where they both score through the 10% and 20% line and the NPV's that these rates would give.<BR><BR>You can never tell exactly what is the IRR so as long you say approximately its fine.<BR><BR><BR>On the graph itself you have an axis on the left labelled for example 0 - £5 and the same axis but below 0 it would be -1 to -5.<BR>On the horizonal axis you will label percentages.

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