ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi all,

I know many of you are wondering if you got the NPC question right at the end of the exam. I did too, well I spoke to my tutor today and he said I had done it correctly, no idea how never seen it before. Anyway I will try and explain the best way I can.

I am sure like me you were all wondering where the sales revenue was at the beginning, but when I re read the question and saw that it said NPC and not NPV thats when I realised they were looking for the total cost of the project over the term and not the value.

The way I did it was to use all the operating figures (as a negative) in the same way you would use net cash flow, so you discount each years operating costs as a negative figure then total these at the end and also add the capital cost figure to that. for project A i came out with a negative value of roughly 1.6 million cant remember what B was poss 1.7 million, I then recommended A as this had the least costs over the term.

As I said I did see my tutor in college today and he said that was the correct way to do it.

Hope this helps & puts those of you who like me last night were panicking about the answer out of your misery..!!!

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    Thanks for that, i knew i did it wrong anyway, but now that its been answered i can understand how it works, but its just frustrating that we werent taught it and its in none of the textbooks.

    They obviously want us to think for ourselves, it just makes me wonder what we are in store for today!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    That is exactly wat I did, got 1649 or something like that for A, then 1775 or something for B. Glad I have done it right. :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    That sounds roughly like what I did.

    I put the initial cost outlay on the top part at year 0 the no other figures in the boxes that follow.

    Underneath I put the costs in for each year from year 2 on.

    In net cash flow I was confused so just put a running total of the total cost lol.

    After that though I used the factors to factor the costs then added the outlay and all costs together to get to two high total costs.

    I recomended A I beleive as although it had a higher initial outlay by year 3 B would have cost more in total, also A cost the least over the total years.

    It was still confusing as hell, not sure I filled it out right.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    Yes it was confusing, but there again so were quite a few of the other tasks, i.e the stock card could poss of been done by the LIFO or AVCO method although i plummbed of AVCO, they threw in the bank for the journals !! and the overhead absorption rate of £140.00 per mile seemed wrong too. Overall I thought it was a very confusing paper & way more difficult to understand than any of the previous papers.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR
    Lolo wrote:
    Yes it was confusing, but there again so were quite a few of the other tasks, i.e the stock card could poss of been done by the LIFO or AVCO method although i plummbed of AVCO, they threw in the bank for the journals !! and the overhead absorption rate of £140.00 per mile seemed wrong too. Overall I thought it was a very confusing paper & way more difficult to understand than any of the previous papers.

    I completely agree!

    Alison
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    At this rate they will be disregarding whole sections of the paper.!! well good luck all in your FRA this afternoon, I am now really worried as Costing was my favourite subject and the one I found easiest, if they do on FRA what they did on costing then there is no hope for me..!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    I agree with you, found costing much easier, I always miss things out on FRA, here's hoping they're nice with this one!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR EXAM NPC.....THE ANSWER YOU ARE ALL LOOKING FOR

    Thank goodness for that I opted for Machine A as well - phew! It was sneaky though - everyone at my college came out with different ideas, figures and answers so none of us knew what we should have done.

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