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Q. Limitations of the five year period of analysis?
A number of restrictions to the analysis potentially arise
- The approach doesn't take account of future benefits/costs after five years either continuing or new
- No information on contract length from the Water Authorities which may be longer than five years
- Other cheaper resources perhaps available over a longer period e.g. it may be cheaper to buy machines rather than rent them
- Analysis doesn't take account of the potential for physical site capacity increases that may turn into available after five years.
What is the relation of profit and matching principle? Do you have a form for this kind of assignment in writting Financial Accounting?
how does the concept of consistency aid in the analysis of financial system?
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