ACCA Advanced Financial Management exam format

AFM is a 3 hours 15 minutes exam of 100 marks in two sections. Every question is a written scenario question, and every question carries professional skills marks.

Length	3 hours 15 minutes
Section A	One case study of 50 marks: 40 technical and 10 professional skills marks
Section B	2 compulsory scenario questions of 25 marks: 20 technical and 5 professional skills marks each
Focus	Every exam has questions focused on syllabus sections B and E
Pass mark	50% of 100 marks

Section A: 50 marks

Section A is always a single 50-mark case study: 40 technical marks and 10 professional skills marks, with all four professional skills examined.

ACCA's study guide says you should expect calculations, comparison with the information given, analysis of the results, and recommendations or conclusions. The case covers issues from at least two of syllabus sections A to E, and asks for a response in a specific format, such as a report to the board of directors.

Section B: 50 marks

Two compulsory questions of 25 marks, each 20 technical and 5 professional skills marks. ACCA says every Section B question is scenario based and mixes calculation and narrative marks: none is wholly narrative.

Each Section B question examines at least two of Analysis and Evaluation, Scepticism and Commercial Acumen.

What every exam covers

Any topic can appear in either section, but ACCA says every exam has questions focused on syllabus sections B, advanced investment appraisal, and E, treasury and advanced risk management.

How it is sat

AFM is one of the Strategic Professional Options. ACCA describes these as computer-based exams answered with tools such as a word processor, spreadsheets and presentation slides.

Try 3 questions

Short questions in the course’s own format, not ACCA’s: the exam itself is all written.

Question 1 · Course practice question · Net present value2 marks

Net present value

Kirkby Co is a new company with no other taxable profits. It is appraising a four-year project costing $2,000,000 now, with no value at the end. Operating cash flows are $200,000, $500,000, $1,200,000 and $1,600,000 in years 1 to 4.

Tax-allowable depreciation is 25% of the cost a year (straight line) from year 1. Tax is 30%, paid in the year profits arise. A tax loss is carried forward and set against the project's next taxable profits. The cost of capital is 10%.

What is the NPV of the project, in $000 to the nearest $000? (2 marks)

Question 2 · Course practice question · Currency hedging2 marks

Currency hedging

Glenmore Co's home currency is the euro. It will receive $2,000,000 in three months and buys exchange-traded euro call options: contract size EUR 125,000, exercise price $1.0800 per EUR 1, premium $0.0150 per EUR 1, paid today and converted at today's spot rate of $1.0750 per EUR 1. The number of contracts is the dollar amount converted at the exercise price, rounded to the nearest whole contract. Any dollars short or left over are dealt at the spot rate in three months.

In three months the spot rate is $1.1000 per EUR 1. Ignore interest on the premium.

What is Glenmore Co's net receipt in euros, after the premium, to the nearest EUR? (2 marks)

Question 3 · Course practice question · Cost of capital2 marks

Cost of capital

Harlow Co has 50 million shares in issue, trading at $3.20 each, and a cost of equity of 11%. It also has $40m (nominal) of bonds trading at $104 per $100 nominal, with a pre-tax cost of debt of 6%.

The rate of corporation tax is 25%, and interest is tax deductible.

What is Harlow Co's weighted average cost of capital, as a percentage to two decimal places? (2 marks)

Next step

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ACCA's AFM syllabus and study guide (PDF)

Questions people ask

How long is the ACCA AFM exam?

Three hours and 15 minutes, for 100 marks, according to ACCA's study guide.

Does AFM have multiple choice questions?

No. ACCA's study guide describes a Section A case study and two Section B scenario questions, all written. The short questions in this course are its own practice format.

What is the pass mark for AFM?

50%. ACCA's study guide says the pass mark for all ACCA Qualification examinations is 50%.

Which topics come up in every AFM exam?

ACCA says every exam has questions focused on syllabus sections B and E: advanced investment appraisal, and treasury and advanced risk management.

Unofficial practice for the ACCA Advanced Financial Management (AFM) exam, not affiliated with ACCA. ACCA is a trademark of the Association of Chartered Certified Accountants, which does not endorse this course. Every question here is original. No VAT is charged.

n	1%	2%	3%	4%	5%	6%	7%	8%	9%	10%	11%	12%	13%	14%	15%	16%	17%	18%	19%	20%
1	0.990	0.980	0.971	0.962	0.952	0.943	0.935	0.926	0.917	0.909	0.901	0.893	0.885	0.877	0.870	0.862	0.855	0.847	0.840	0.833
2	0.980	0.961	0.943	0.925	0.907	0.890	0.873	0.857	0.842	0.826	0.812	0.797	0.783	0.769	0.756	0.743	0.731	0.718	0.706	0.694
3	0.971	0.942	0.915	0.889	0.864	0.840	0.816	0.794	0.772	0.751	0.731	0.712	0.693	0.675	0.658	0.641	0.624	0.609	0.593	0.579
4	0.961	0.924	0.888	0.855	0.823	0.792	0.763	0.735	0.708	0.683	0.659	0.636	0.613	0.592	0.572	0.552	0.534	0.516	0.499	0.482
5	0.951	0.906	0.863	0.822	0.784	0.747	0.713	0.681	0.650	0.621	0.593	0.567	0.543	0.519	0.497	0.476	0.456	0.437	0.419	0.402
6	0.942	0.888	0.837	0.790	0.746	0.705	0.666	0.630	0.596	0.564	0.535	0.507	0.480	0.456	0.432	0.410	0.390	0.370	0.352	0.335
7	0.933	0.871	0.813	0.760	0.711	0.665	0.623	0.583	0.547	0.513	0.482	0.452	0.425	0.400	0.376	0.354	0.333	0.314	0.296	0.279
8	0.923	0.853	0.789	0.731	0.677	0.627	0.582	0.540	0.502	0.467	0.434	0.404	0.376	0.351	0.327	0.305	0.285	0.266	0.249	0.233
9	0.914	0.837	0.766	0.703	0.645	0.592	0.544	0.500	0.460	0.424	0.391	0.361	0.333	0.308	0.284	0.263	0.243	0.225	0.209	0.194
10	0.905	0.820	0.744	0.676	0.614	0.558	0.508	0.463	0.422	0.386	0.352	0.322	0.295	0.270	0.247	0.227	0.208	0.191	0.176	0.162
11	0.896	0.804	0.722	0.650	0.585	0.527	0.475	0.429	0.388	0.350	0.317	0.287	0.261	0.237	0.215	0.195	0.178	0.162	0.148	0.135
12	0.887	0.788	0.701	0.625	0.557	0.497	0.444	0.397	0.356	0.319	0.286	0.257	0.231	0.208	0.187	0.168	0.152	0.137	0.124	0.112
13	0.879	0.773	0.681	0.601	0.530	0.469	0.415	0.368	0.326	0.290	0.258	0.229	0.204	0.182	0.163	0.145	0.130	0.116	0.104	0.093
14	0.870	0.758	0.661	0.577	0.505	0.442	0.388	0.340	0.299	0.263	0.232	0.205	0.181	0.160	0.141	0.125	0.111	0.099	0.088	0.078
15	0.861	0.743	0.642	0.555	0.481	0.417	0.362	0.315	0.275	0.239	0.209	0.183	0.160	0.140	0.123	0.108	0.095	0.084	0.074	0.065

n	1%	2%	3%	4%	5%	6%	7%	8%	9%	10%	11%	12%	13%	14%	15%	16%	17%	18%	19%	20%
1	0.990	0.980	0.971	0.962	0.952	0.943	0.935	0.926	0.917	0.909	0.901	0.893	0.885	0.877	0.870	0.862	0.855	0.847	0.840	0.833
2	1.970	1.942	1.913	1.886	1.859	1.833	1.808	1.783	1.759	1.736	1.713	1.690	1.668	1.647	1.626	1.605	1.585	1.566	1.547	1.528
3	2.941	2.884	2.829	2.775	2.723	2.673	2.624	2.577	2.531	2.487	2.444	2.402	2.361	2.322	2.283	2.246	2.210	2.174	2.140	2.106
4	3.902	3.808	3.717	3.630	3.546	3.465	3.387	3.312	3.240	3.170	3.102	3.037	2.974	2.914	2.855	2.798	2.743	2.690	2.639	2.589
5	4.853	4.713	4.580	4.452	4.329	4.212	4.100	3.993	3.890	3.791	3.696	3.605	3.517	3.433	3.352	3.274	3.199	3.127	3.058	2.991
6	5.795	5.601	5.417	5.242	5.076	4.917	4.767	4.623	4.486	4.355	4.231	4.111	3.998	3.889	3.784	3.685	3.589	3.498	3.410	3.326
7	6.728	6.472	6.230	6.002	5.786	5.582	5.389	5.206	5.033	4.868	4.712	4.564	4.423	4.288	4.160	4.039	3.922	3.812	3.706	3.605
8	7.652	7.325	7.020	6.733	6.463	6.210	5.971	5.747	5.535	5.335	5.146	4.968	4.799	4.639	4.487	4.344	4.207	4.078	3.954	3.837
9	8.566	8.162	7.786	7.435	7.108	6.802	6.515	6.247	5.995	5.759	5.537	5.328	5.132	4.946	4.772	4.607	4.451	4.303	4.163	4.031
10	9.471	8.983	8.530	8.111	7.722	7.360	7.024	6.710	6.418	6.145	5.889	5.650	5.426	5.216	5.019	4.833	4.659	4.494	4.339	4.192
11	10.368	9.787	9.253	8.760	8.306	7.887	7.499	7.139	6.805	6.495	6.207	5.938	5.687	5.453	5.234	5.029	4.836	4.656	4.486	4.327
12	11.255	10.575	9.954	9.385	8.863	8.384	7.943	7.536	7.161	6.814	6.492	6.194	5.918	5.660	5.421	5.197	4.988	4.793	4.611	4.439
13	12.134	11.348	10.635	9.986	9.394	8.853	8.358	7.904	7.487	7.103	6.750	6.424	6.122	5.842	5.583	5.342	5.118	4.910	4.715	4.533
14	13.004	12.106	11.296	10.563	9.899	9.295	8.745	8.244	7.786	7.367	6.982	6.628	6.302	6.002	5.724	5.468	5.229	5.008	4.802	4.611
15	13.865	12.849	11.938	11.118	10.380	9.712	9.108	8.559	8.061	7.606	7.191	6.811	6.462	6.142	5.847	5.575	5.324	5.092	4.876	4.675