ACCA AFM · unedited walkthrough · 15 Oct 2026
Four NPV attempts, marked as they happened
Four attempts at live Gradd NPV questions, on the worksheet students use: one right, one with a single wrong step, one with an early mistake carried through, and one with every step right and the total wrong. Each reply below is the first one, unedited, served on production on 15 Oct 2026. The attempts are ours, made from a Gradd walk account: we sit our own platform as a student would.
Figures and marks are shown as a table: the cells submitted in this walk, with the marks production served for them, recorded as they were served; the original screenshot is linked under each attempt.
Attempt A: Everything right
A correct NPV is marked correct
Advise the board of NorthernRx Biosciences Inc. whether it should proceed with the Veldora manufacturing expansion project, supporting your recommendation with a net present value (NPV) appraisal and an assessment of how sensitive the decision is to the reliability of the projected annual operating cash flows.
| CAD m | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|---|
| Real op. cash flow | 13.5 | 15.8 | 16.4 | 14.2 | ||
| Inflation factor (3%) | 1.030 | 1.0609 | 1.0927 | 1.1255 | ||
| Nominal op. cash flow | 13.91✓ | 16.76✓ | 17.92✓ | 15.98✓ | ||
| Tax-allowable depn (TAD) | 9.50✓ | 7.13✓ | 5.34✓ | 11.53✓ | ||
| Tax on op. flow (paid) | 3.68✓ | 4.44✓ | 4.75✓ | 4.24✓ | ||
| Tax saving on TAD (rec.) | 2.52✓ | 1.89✓ | 1.42✓ | 3.06✓ | ||
| Outlay / scrap | -42 | 4.5 | ||||
| Net cash flow | -42.00 | 13.91✓ | 15.59✓ | 15.37✓ | 17.15✓ | -1.18✓ |
| Discount factor (11%) | 1.000 | 0.9009 | 0.8116 | 0.7312 | 0.6587 | 0.5935 |
| Present value | -42.00 | 12.53✓ | 12.66✓ | 11.24✓ | 11.30✓ | -0.700✓ |
| NPV | 5.02✓ |
Every figure on the worksheet checks against the worked answer (✓). Whether the whole answer is complete, recommendation included, is the tutor’s judgement — and a code check would have overruled that "correct" if any figure on the sheet had been wrong.
The NPV is positive, so on these assumptions the project adds shareholder value and should be accepted. Sensitivity: holding everything else equal, the annual operating cash flows can fall by about 13.2% (measured against the post-tax present value of the operating cash flows, about CAD 37.9m) before the NPV reaches zero and the decision reverses. So the recommendation to proceed is conditional: the board should stress-test the contracted volumes against a renegotiation at renewal, require an explicit currency-risk premium in the discount rate given the foreign-currency revenue, have the residual value of the cleanroom assets independently valued, and confirm the tax classification behind the 25% allowance pool, since a weaker shield would reduce the NPV.
That's it.
That went in on the first attempt.
You've earned this one — say "show me the model answer" and I'll show you how a full-marks version is laid out, so you can compare.
Attempt B: One wrong step
A wrong step is named
Advise the board of NorthStar Biogenics Inc. whether it should proceed with the GenFlex-7 manufacturing expansion, supporting your recommendation with a net present value (NPV) appraisal that explicitly treats inflation and taxation (including tax-allowable depreciation).
| CAD m | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|---|
| Real op. cash flow | 9.2 | 12.8 | 13.5 | 11.4 | ||
| Inflation factor (3.5%) | 1.035 | 1.0712 | 1.035 | 1.1475 | ||
| Nominal op. cash flow | 9.52✓ | 13.71✓ | 13.97✗ | 13.08✓ | ||
| Tax-allowable depn (TAD) | 9.00✓ | 6.75✓ | 5.06✓ | 10.69✓ | ||
| Tax on op. flow (paid) | 2.52✓ | 3.63✓ | 3.70↳ | 3.47✓ | ||
| Tax saving on TAD (rec.) | 2.39✓ | 1.79✓ | 1.34✓ | 2.83✓ | ||
| Outlay / scrap | -38 | 4.5 | ||||
| Net cash flow | -38.00 | 9.52✓ | 13.57✓ | 12.13↳ | 15.22↳ | -0.634✓ |
| Discount factor (11%) | 1.000 | 0.9009 | 0.8116 | 0.7312 | 0.6587 | 0.5935 |
| Present value | -38.00 | 8.58✓ | 11.02✓ | 8.87↳ | 10.03↳ | -0.377✓ |
| NPV | 0.112↳ |
The one figure that is off is marked ✗ and named, with which way it is off — but not the right number. The figures worked from it are shown as following from it, not marked wrong again.
The NPV is positive, so the board should proceed.
Checked against the worked answer: your net after-tax cash flows for years 1, 2 and 5, your present values for years 1, 2 and 5, your nominal operating cash flows for years 1, 2 and 4, your tax-allowable depreciation for years 1, 2, 3 and 4, your tax on operating cash flow paid in years 2, 3 and 5 and your tax saving on tax-allowable depreciation received in years 2, 3, 4 and 5 are right. Your nominal operating cash flow for year 3 is not right — it is too low.
Start with your nominal operating cash flow for year 3: it has one year of inflation applied, and a year-3 flow carries three. Your net after-tax cash flows for years 3 and 4, your present values for years 3 and 4, your net present value and your tax on operating cash flow paid in year 4 are built on it, so they will change once it is fixed.
Rework that step first, then carry it through to your NPV and recommendation.
Attempt C: An early mistake, carried through
A mistake is marked once — never marked wrong again further down
Advise the board of NovaBiologics Inc. whether to proceed with the proposed acquisition and commissioning of the Montréal fill-finish facility, presenting a fully worked NPV appraisal and an integrated strategic recommendation that addresses the key assumptions underlying the forecast.
| CAD m | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|---|
| Real op. cash flow | 10.2 | 14.8 | 17.5 | 16 | ||
| Inflation factor (3%) | 1.030 | 1.0609 | 1.0927 | 1.1255 | ||
| Nominal op. cash flow | 10.51✓ | 15.70✓ | 19.12✓ | 18.01✓ | ||
| Tax-allowable depn (TAD) | 10.40✗ | 7.28↳ | 5.10↳ | 7.39↳ | ||
| Tax on op. flow (paid) | 2.78✓ | 4.16✓ | 5.07✓ | 4.77✓ | ||
| Tax saving on TAD (rec.) | 2.76↳ | 1.93↳ | 1.35↳ | 1.96↳ | ||
| Outlay / scrap | -52 | 4.5 | ||||
| Net cash flow | -52.00 | 10.51✓ | 15.67↳ | 16.89↳ | 18.79↳ | -2.81↳ |
| Discount factor (11%) | 1.000 | 0.9009 | 0.8116 | 0.7312 | 0.6587 | 0.5935 |
| Present value | -52.00 | 9.46✓ | 12.72↳ | 12.35↳ | 12.38↳ | -1.67↳ |
| NPV | -6.76↳ |
The early mistake (the year-1 allowance) is marked ✗ once. Every figure worked correctly from it is shown ↳ “follows from an earlier figure — will change”: none of them is marked wrong.
The NPV is negative, so the board should reject the project.
Checked against the worked answer: your net after-tax cash flow for year 1, your present value for year 1, your nominal operating cash flows for years 1, 2, 3 and 4 and your tax on operating cash flow paid in years 2, 3, 4 and 5 are right. Your tax-allowable depreciation for year 1 is not right — it is too low.
Start with your tax-allowable depreciation for year 1. Your net after-tax cash flows for years 2, 3, 4 and 5, your present values for years 2, 3, 4 and 5, your net present value, your tax-allowable depreciation for years 2, 3 and 4 and your tax saving on tax-allowable depreciation received in years 2, 3, 4 and 5 are built on it, so they will change once it is fixed.
Rework that step first, then carry it through to your NPV and recommendation.
Attempt D: Every step right, the total wrong
Every step right, the total wrong — caught
Advise the board of NorthStar Biogenics Inc. whether to proceed with the GlycoSynth-7 manufacturing expansion, given the company’s capital rationing position, by appraising the project using net present value and profitability index, and determining the optimal allocation of the available capital across GlycoSynth-7 (which is indivisible) and the competing divisible proposals.
| CAD m | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|---|
| Real op. cash flow | 5.2 | 6.8 | 7.4 | 6.1 | ||
| Inflation factor (3%) | 1.030 | 1.0609 | 1.0927 | 1.1255 | ||
| Nominal op. cash flow | 5.4✓ | 7.2✓ | 8.1✓ | 6.9✓ | ||
| Tax-allowable depn (TAD) | 4.5✓ | 3.4✓ | 2.5✓ | 5.1✓ | ||
| Tax on op. flow (paid) | 1.4✓ | 1.9✓ | 2.1✓ | 1.8✓ | ||
| Tax saving on TAD (rec.) | 1.2✓ | 0.9✓ | 0.7✓ | 1.3✓ | ||
| Outlay / scrap | -18 | 2.5 | ||||
| Net cash flow | -18.00 | 5.4✓ | 7.0✓ | 7.1✓ | 7.9✓ | -0.5✓ |
| Discount factor (11%) | 1.000 | 0.9009 | 0.8116 | 0.7312 | 0.6587 | 0.5935 |
| Present value | -18.00 | 4.8✓ | 5.7✓ | 5.2✓ | 5.2✓ | -0.3✓ |
| NPV | -0.4✗ |
Every step checks out, but the net present value was added up wrong — enough to flip the decision. Only the total is marked ✗: “Your net present value does not follow from your own figures — it is too low.”
The NPV is negative, so the project should be rejected.
Checked against the worked answer: your net after-tax cash flows for years 1, 2, 3, 4 and 5, your present values for years 1, 2, 3, 4 and 5, your nominal operating cash flows for years 1, 2, 3 and 4, your tax-allowable depreciation for years 1, 2, 3 and 4, your tax on operating cash flow paid in years 2, 3, 4 and 5 and your tax saving on tax-allowable depreciation received in years 2, 3, 4 and 5 are right. Your net present value does not follow from your own figures — it is too low.
Start with your net present value: the figures it is built from check out, so the error is in how it is derived from them.
Rework that step first, then carry it through to your NPV and recommendation.
How this is checked
The figures on the worksheet are checked by code against the question’s worked answer: ✓ checks out, ✗ not right, ↳ follows from an earlier figure. The sentence that says which figure is off, and which way, is written by code, not by the AI. The coaching around it, and the judgement of whether a whole answer is complete, recommendation included, are written by the AI tutor; a filter removes figures and praise from that coaching when the answer isn’t right. This checking covers the NPV worksheet; it does not cover every question type.
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