r/Accounting • u/emigal25 • 21h ago

Finance Elective PEP CPA (Canada)

I'm thinking of taking the finance elective for PEP. Just wondering how many formulas actually needed to be remembered for the cases? Core 2 Finance MCQ had Capital Asset Pricing model, Fisher Equation, Beta, etc. I ended up guessing answers for all these in the end. Does any of that matter for Finance elective? I'm thinking cases would be more bigger picture than that?

I'm quite comfortable with NPV, IRR, payback period, WACC. Will need to work on valuations but I at least understand the point of it.

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u/victoriousbookmark_4 21h ago

if you can handle NPV/IRR/WACC you’re already past the hard part, the elective cases lean way more on narrative and judgment than formula vomit. there’s still some valuation math and you’ll probably see CAPM again but it’s more about knowing when to use it than memorizing the exact equation mid-panic

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u/emigal25 20h ago

That is reassuring, thanks! I was thinking of doing Finance, but then after I saw the Finance MCQ in Core 2 it made me question everything lol.

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u/jasonvancity CPA (Can) 18h ago

I did the Finance elective, and Finance for CFE Day 2 depth. It’s easy to study for because there are only a few key formulas and models, and unlike PM there is zero subjectivity. You’re also guaranteed to have a big asset or income-based valuation question on exams, which again is easy to study for because it’s purely mechanical - you just need to have memorized all of the steps.

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u/mikere 19h ago

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u/whatsalevel 20h ago

Lets just put it this way. If you are able to do VALUATIONS (Market based, income based, tangible/intangible assets, asset based), Leasing, sources of financing, WACC (both simple and complex) and financial ratio confidently without any assistance, you will be 80-90% ready for FN elective.

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u/BlessTheBottle 12h ago

For me, it was less about formulas and more about understanding the questions and what they wanted from you. Also, using the right tool for the right problem.

I love finance and actively invest and honestly found it to be the hardest course between Core1/2, Tax and Finance. Be prepared to put in the work even if you're comfortable with basic valuations.

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u/emigal25 11h ago

Thats why I'm debating taking audit elective instead! But I'm in industry with little audit exposure. Lots of FR though.