Mark Scheme

July 2021

Pearson LCCI Certificate in

Advanced Business Calculations
Level 3 (ASE3003)

ASE3003
JULY 2021
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ASE3003
JULY 2021
General Marking Guidance

• All candidates must receive the same treatment. Examiners must mark the
first candidate in exactly the same way as they mark the last.

• Mark schemes should be applied positively. Candidates must be rewarded

for what they have shown they can do rather than penalised for omissions.

• Examiners should mark according to the mark scheme not according to

their perception of where the grade boundaries may lie.

• There is no ceiling on achievement. All marks on the mark scheme should

be used appropriately.

• All the marks on the mark scheme are designed to be awarded. Examiners
should always award full marks if deserved, i.e. if the answer matches the
mark scheme. Examiners should also be prepared to award zero marks if
the candidate’s response is not worthy of credit according to the mark
scheme.

• Where some judgement is required, mark schemes will provide the

principles by which marks will be awarded and exemplification may be
limited.

• When examiners are in doubt regarding the application of the mark scheme
to a candidate’s response, the team leader must be consulted.

• Crossed out work should be marked UNLESS the candidate has replaced it
with an alternative response.

ASE3003
JULY 2021
Question Answer Mark
Number
1 (a) Percentage interest in 9 months
3 1.330%
= = 0.9975%
4 M1

Value at redemption = ฿44,000,000 x 1.009975

= ฿44,438,900 M1

= ฿44,439,000 to nearest thousand. A1r (3)

Question Answer Mark

Number
1 (b) Interest in year 4 = ฿1,342,102 - ฿1,331,450 M1
= ฿10,652

Rate of interest = 10,652 / 1,331,450 M1

= 0.8% to the nearest 0.1% A1r
(3)

Question Answer Mark

Number
1 (c)(i) Original sum = ฿1,331,450 / 1.0083 M1
= ฿1,299,999.74 = ฿1,300,000
A1ft (2)

Question Answer Mark

Number
1 (c)(ii) Total after second year
= ฿1,300, 000 1.0082 = ฿1,320,883 M1
Total interest added
= ฿1,320,883 – ฿1,300,000 = ฿20,883 M1A1ft (3)

(Total for Question 1 = 11 marks)

ASE3003
JULY 2021
Question Answer Mark
Number
2 (a) Total costs of Wi-Five production
= ฿2,750,000 + (5,000 x ฿350) M1
= ฿4,500,000
Total variable costs of Wi-Three production
= 5,000 x ฿150 = ฿750,000 M1
Fixed costs for Wi-Three production
= ฿4,500,000 – ฿750,000 M1
= ฿3,750,000 A1 (4)

Question Answer Mark

Number
2 (b)(i)

Total Cost in baht of wireless systems

output
6

5
Total cost in millions of baht

0
0 2000 4000 6000 8000
Number of systems produced

Wi-Five Wi-Three

Marks for correct axes and labelling A1A1

Position of intersection A1
Intercept for each line on the y axis A1 (4)

Question Answer Mark

Number
2 (b)(ii) Correct area shaded to the left of 5 000 A1ft
systems (1)

Question Answer Mark

Number
2 (b)(iii) Correct calculated value is ฿4,200,000
Therefore, accept answers indicated on the chart in (b)(i) A1
between ฿4,100,000 and ฿4,300,000 (1)

ASE3003
JULY 2021
Question Answer Mark
Number
2 (c) Overhead expenses = 0.35 x ฿350 = ฿122.5 M1
Labour = 2/7 x ฿350 = ฿100 M1
Materials = ฿350 – ฿122.5 – ฿100 = ฿127.5 A1 (3)

Total for Question 2 = 13 marks

ASE3003
JULY 2021
Question Answer Mark
Number
3 (a)(i) Equation is:

30 x + 20 y = 9000 A1
(1)

Question Answer Mark

Number
3 (a)(ii) Equation is:

12 x + 20 y = 6000 A1
(1)

Question Answer Mark

Number
3 (b)(i)

Marks for correct axes and labelling A1

Position of intersection A1
Intercept for each line on the y axis and x axis A1A1 (4)

Question Answer Mark

Number
3 (b)(ii) The area closest to the origin, bounded by both lines
should be shaded.
A1 for area bounded by either line A1
A1 for area bounded by both lines A1
(2)

ASE3003
JULY 2021
Question Answer Mark
Number
3 (c) Accurate value is 240, but allow use of candidate’s own
figure shown on their graph. M1
Accept answers in a range of +/-20 of the figure. A1ft (2)

Question Answer Mark

Number
3 (d) Actual value is 166, but allow use of candidate’s own
figure shown on their graph. M1
Accept answers in a range of +/-20 of the figure. A1ft (2)

Total for Question 3 = 12 marks

ASE3003
JULY 2021
Question Answer Mark
Number
4 (a)
฿ Discount NPV (฿)
Factor
Cost 26,000,000 -1.000 -26,000,000 M1
Year 1 3,500,000 0.935 3,272,500
Year 2 14,000,000 0.873 12,222,000 A1 (any)
Year 3 17,000,000 0.816 13,872,000
Year 4 21,000,000 0.763 16,023,000
--------------
M1

19,389,500 A1

First M1 is for setting about the NPV calculation correctly,

including the investment cost at par and shown as
negative. A1 for any one of the yearly contributions to
NPV. Second M1 is for adding the figures. Final A1 is for (4)
achieving the correct answer.

Question Answer Mark

Number
4 (b) New capital cost is ฿26m x 1.5 = ฿39m
Cash inflow is
2  (3, 272,500 + 12, 222, 000 + 13,872, 000 + 16, 023, 000)
= 90, 779, 000 M1
New net present value is 90,779,000 – 39,000,000
M1
=฿51,779,000
As a percentage of the original this is:
A1
51,779,000
100 = 267.05% , accept 267% or more accurate.
19,389,500 (3)

Question Answer Mark

Number
4 (c) Yes, I would support the proposal. The capital costs A1ft
are an additional ฿13,000,000 but the increase in
NPV is more than twice this much. A1ft

Alternatively,
No – the extra finance required by his proposal (A1)
may not be available. (A1)
(2)

ASE3003
JULY 2021
Question Answer Mark
Number
4 (d) IRR

19,389,500
= 7% + (15% − 7%)
(19,389,500 − 10,814,000) M1M1

= 7% + 18.08827%
= 25.08827%
Accept 25% or more accurate A1

M1 for numerator in formula, and M1 for denominator.

Alternatively, IRR

19,389,500 15% − 10,814,000  7% 215,144,500

= =
19,389,500 − 10,814,000 8,575,500
(M1M1)

= 25.08827% as before.(A1) (3)

Total for Question 4 = 12 marks

ASE3003
JULY 2021
Question Answer Mark
Number
5 (a) Rate of depreciation:
1,584, 000  (1 − r )3 = 7,350, 000
1,584,000 M1
Thus, (1 − r )3 =
7,350,000
1,584, 000
So that 1 − r = 3 M1
7,350, 000
=0.599546
So r = 0.400454 A1

Rate of depreciation is 40.05% to 2dp A1r (4)

Question Answer Mark

Number
5 (b)(i) Depreciation from year 3 to year 7 is
1,584,000 – 384,000 = 1,200,000

Annual depreciation is 1,200,000 / 4 M1

= ฿300,000 A1(2)

Question Answer Mark

Number
5 (b)(ii) Book value one year earlier is
384,000 + 300,000 = ฿684,000 M1A1(2)

Question Answer Mark

Number
5 (c) Book value will be 7,350, 000  (1 − 0.36)7 M1M1
= ฿323,256 A1
(3)

Question Answer Mark

Number
5 (d) Scrap value will be 7,350, 000 − (7  983, 000) M1
= ฿469,000 A1
(2)

(Total for Question 5 = 13 marks)

ASE3003
JULY 2021
Question Answer Mark
Number
6 (a)(i) Liabilities = 280,469€ + 117,931€ M1
= 398,400€
Assets as a percentage
= 314,669€ / 398,400€ M1
= 0.7898318 = 78.98% to 4sf A1r
(3)

Question Answer Mark

Number
6 (a)(ii) Paid to unsecured creditors
= 314,669€ - 280,469€ M1
= 34,200€ A1
(2)

Question Answer Mark

Number
6 (a)(iii) Dividend calculation: 34,200€ / 117,931€ M1
= 0.29
Dividend rate payable is 29c in the euro A1
Also accept 0.29€ in the euro (2)

Question Answer Mark

Number
6 (b) Natural Networks received more than 0.29€ in the
euro. A1
Therefore, Natural Networks is, in part, a secured
creditor. A1
The second mark is only available to candidates
scoring the first mark. (2)

Question Answer Mark

Number
6 (c)(i) Chiang Mai Cables is the unsecured creditor.
The amount paid is 0.29 x 74,000€ = 21,460€ M1A1
(2)

Question Answer Mark

Number
6 (c)(ii) Natural Networks is both a secured creditor and an
unsecured creditor.
Let the amount owed to Natural Networks as a
secured creditor be S. M1
Then, S + 0.29(37,000 - S) = 14,280 M1
Thus 0.71S = 14,280 – 10,730 = 3,550
Amount of secured debt = 3,550 / 0.71 M1
= 5,000€. A1(4)

(Total for Question 6 = 15 marks)

ASE3003
JULY 2021
Question Answer Mark
Number
7 (a)(i) Current ratio = £833,610 / £333,444 M1
= 2.5 : 1 A1 (2)

Question Answer Mark

Number
7 (a)(ii) Bank account has
£833,610 - (£248,450 + £7,620 + £243,550) M1
= £333,990 A1 (2)

Question Answer Mark

Number
7 (b) The current ratio is healthy because it is greater A1
than 2 : 1, which is the recommended "healthy" A1
lower limit. (2)

Question Answer Mark

Number
7 (c)(i) Stock at start of year
= £217,400 - (£248,450 - £217,400) = £186,350 M1A1

Alternatively, (2)
(2 x £217,400) - £248,450 = £186,350 (M1A1)

Question Answer Mark

Number
7 (c)(ii) COGS = £2,627,300 + £186,350 - £248,450 M1
= £2,565,200 A1ft
(2)

Question Answer Mark

Number
7 (c)(iii) Rate of stockturn = £2,565,200 / £217,400 M1
= 11.79944802 = 11.8 times per annum A1ft
(2)

(Total for Question 7 = 12 marks)

ASE3003
JULY 2021
Question Answer Mark
Number
8 (a) April = 97.96, so

97.97
May = 100 = 100.0
97.96 M1A1

99.51
June = 100 = 101.6
97.97 A1

100.17
July = 100 = 100.7
99.51 A1

M1 is for correct method of calculation in any year (4)

Question Answer Mark

Number
8 (b) Inflation from March to December is
100.51 – 100 = 0.51% M1A1

(2)

Question Answer Mark

Number
8 (c) Index for median wage is
14,317 A1
Q2 = 100 = 99.5
14,392
14, 670
Q3 = 100 = 101.9 A1
14,392
14,620
Q4 = 100 = 101.6
14,392 A1
(3)

Question Answer Mark

Number
8 (d) The CPI from March to December has increased by
0.51%
Median wages from Q1 to Q4 have risen by 1.6% A1

Comparison of the two figures, showing wage A1

increase greater than price increase.

Hence, workers are, on average, better off at the

A1
end of the period.
(3)

(Total for Question 8 = 12 marks)

Total for Paper = 100 marks

ASE3003
JULY 2021