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Syllabus GRID:
Here is the grid of Syllabus of CFAP Business Finance Decisions.
| Grid | Weightage |
| Investment appraisal and decision making | 40-60 |
| Valuation | 15-20 |
| Risk management | 15-20 |
| Management controls | 10-20 |
| Total | 100 |
Course Outline:
The course outline gives an overview of Syllabus of CFAP Business Finance Decisions . The detailed Syllabus of CFAP Business Finance Decisions for Spring 2022 attempt is given below.
INVESTMENT APPRAISAL AND DECISION MAKING
Cost of capital
Cost of equity, cost of debt and weighted average cost of capital (WACC)
Capital Asset Pricing Model (CAPM)
Arbitrage Pricing Theory (APT)
Bond’s return analysis – yield to maturity or yield to call etc.
Investment Appraisal
Project analysis using NPV, APV, IRR, MIRR, EIRR, Profitability Index and Payback (including the effect of inflation)
Project analysis using ratio analysis
Application of Monte Carlo simulation to investment appraisal
Sensitivity analysis
Portfolio analysis
Capital rationing
International investment appraisal
Decision Making
Make or buy decisions
Pricing for special orders
Further processing decisions
Decision with limiting factors
Introduction to mathematical programming and linear programming, formulation of problems, graphical solutions, limitations of linear programming and shadow price concept. (excluding simplex method)
Dividend policy, optimal capital structure and MM theory
Decision tree
VALUATION
Equity securities
Debt securities
Appraisals on business valuation, acquisitions, mergers, demergers, spin off, spin out and new project including sensitivity analysis
Financial and capital structuring and its effects on business valuation – Modigliani and Millar theory, Millar model, Hamada equation
RISK MANAGEMENT
Hedging interest rate : Futures, Options, Swaps, Swaptions and Forward agreement
Hedging Foreign Exchange : Currency futures, Swaps, Options, Forward, Swaptions and Money Market hedge
Commodity and security: Forward and future contracts
MANAGEMENT CONTROLS
Variance analysis
Transfer pricing
Working capital management
Inventory management – economic order quantity and inventory level decisions
Debtor/creditor management – policies, financing, factoring, discount
Cash management – Liquidity, cash flow forecasting, short term investments
Forecasting and budgeting
syllabus of CFAP4 Business Finance Decisions:
syllabus of CFAP4 Business Finance Decisions syllabus of CFAP4 Business Finance Decisions syllabus of CFAP4 Business Finance Decisions syllabus of CFAP4 Business Finance Decisions syllabus of CFAP4 Business Finance Decisions syllabus of CFAP4 Business Finance Decisions
Effective from Summer 2019,
Any revision and amendment in legislation, standard, code, guideline and statement shall
not be part of syllabus before six months’ period elapsed:
a) in case of legislation, from the date of publication thereof by the issuing authority;
b) in case of revised or new standard, code, guideline and statement, from the date of
publication of study material by the Institute or date of application prescribed by the
issuing authority of the same, whichever is later; and
c) in case of changes in existing standard, code, guideline and statement, from the date
of publication or notification by the Institute even if they are applicable on a later date.
Provided that Finance Act or Ordinance, and notifications and circulars relating to Finance
Act or Ordinance, issued four months prior to the date of examination shall be considered
forming part of syllabus, in case of CFAP.
For Winter 2021 attempt:
International financial reporting standards (IFRS) edition 2020 will be applicable.
International auditing and assurance standards (ISA) edition 2018 will be applicable.
Code of ethics edition 2019 will be applicable.
Syllabus – Testing Levels
*Testing Level and assessment of contents of earlier stages of qualification
The following policy for testing level and assessment of contents shall be applicable for
Accounting related subjects i.e. (CAF 1 Introduction to Accounting, CAF 5 Financial Accounting
and Reporting-I, CAF 7 Financial Accounting and Reporting-II and CFAP 1 Advanced
Accounting and Financial Reporting)
a. Technical contents assessed at earlier stages of qualification will be tested in later stages
with a limit of 8 marks per topic in an attempt.
b. The contents of syllabus may classify topics at three testing levels from 1 to 3 with a
maximum limit per question as 8, 20 and 25, respectively.
c. The overall marks of earlier stage topics and testing level-1 topics, as mentioned above, will
have a maximum limit of 35 marks in aggregate in an attempt.
*Explanation: A topic of CAF 1 can be examined in CAF 5, CAF 7 and CFAP 1 even if it is not in
the syllabus or study material of the later stage papers, likewise CAF 5 topics can be examined
in CAF 7 and CFAP 1; and CAF 7 topics can be examined in CFAP 1.
