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CP3 September 2020

T

TobyWanKenobi

Member
How did everyone find the exam? This is one of those exams where it is so hard to predict how one did!
 
Thought it was a straight forward question - Did you do any calculations in answering the question - the impact each change on assumption had on profit?
 
I drew a chart that plotted the profit before and after the proposed changes. This showed the proposed changes were profitable over the long term. How did you tackle this?
 
Can't remember off top of my head how many change in assumptions there were - but lets say there were 5 - i went to the "original" model and update each assumption - and showed the impact that one assumption had on profit - and then repeated that 5 times - and had a graph showing the impact - hence by doing it that way it showed that while we made a loss on longer calls, it was more than offset by the other changes in assumptions which showed large profits.

I was little worried it i went into too much detail doing this approach but figure this was best way to show impact of change of each assumption - but as you said before it's impossible to know what they are looking for -
 
There were 2 proposed changes. In hindsight I should have done what you did and shown the impact of each change and then possibly the combined impact, but I was somewhat rushed for time and ended just plotting the combined impact. Hopefully, I don't lose too many marks there. Did you include an executive summary given this was a paper?
 
TobyWanKenobi said:
There were 2 proposed changes. In hindsight I should have done what you did and shown the impact of each change and then possibly the combined impact, but I was somewhat rushed for time and ended just plotting the combined impact. Hopefully, I don't lose too many marks there. Did you include an executive summary given this was a paper?
Click to expand...
i included the executive summary

I felt that including an overall impact would actually be better than plotting the individual impacts because of the mix of the committee... since a majority of them are executives and since the profits are what they're bothered about, i chose to include only the total impact because that's what they care most about
 
padasala said:
i included the executive summary

I felt that including an overall impact would actually be better than plotting the individual impacts because of the mix of the committee... since a majority of them are executives and since the profits are what they're bothered about, i chose to include only the total impact because that's what they care most about
Click to expand...
How many sections did you have and what was in each section?
 
Ace123 said:
How many sections did you have and what was in each section?
Click to expand...

I started off with an exectuive summary that gave a summary of the whole thing along with the final impact on profits

Next section went about changes to script, whcih had two sub-sections for each change

Third section benefits of recommendations

Fourth section was impact on profits
 
padasala said:
I started off with an exectuive summary that gave a summary of the whole thing along with the final impact on profits

Next section went about changes to script, whcih had two sub-sections for each change

Third section benefits of recommendations

Fourth section was impact on profits
Click to expand...

I would usually include an Executive Summary too but in this case I didn't and I justified my decision in question 2 (i). My main reason for this was that I thought the Sales Directors would be confused if I started the paper explaining that a fall in sales volumes will actually lead to an increase in profits. So, instead I had an introduction, proposed changes to script, impact of proposed changes and a summary. This would give me a better chance to explain to them this key controversial message that a fall in sales can still be good for business.
 
I think you'll have to wait till tomorrow for the Examiner's reports.
 
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