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QUESTION 1
Part A
i) Define the terms finance lease and operating lease and explain how you would distinguish between the two leases
ii) When accounting for finance leases, accountants prefer to overlook legal framework in favour of commercial substance
Part B
i) State the major advantages of preparing a statement of cash flow
ii) Discuss briefly the formal process of International Financial Reporting Standards (IFRS) setting
Your firm will produce widgets for the next 10 years (starting at t=1). Annual revenue from selling widgets is $20,000. Production requires an initial outlay (at t=0) for machin
What is Rationale and behind profitability maximisation Rationale & behind profitability maximisation, as a guide to financial decision making, is simple. Profit is a test of e
Dividend Payout Ratio The percentage of earnings or profit paid to shareholders in dividends. Computed as: The payout ratio gives an idea about how well earning
Potential drawbacks of divestment - There may be some loss of economies of scale. Fixed overheads would have a lower capacity to recover them. - Cash generated may not be
QUESTION The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some t
Accrued Payroll was $10,000 and $15,000 at the beginning and end of 20X4, respectively. The payroll expense for 20X4 totaled $520,000. Cash outflow for payroll during 20X4 totaled:
Part 1: Contingency plan Create contingency plans for the following scenarios: > One of your highly qualified consultants has given three months notice and is planning to move to a
sums
Q. Show objections against profit maximization? 1) Profit cannot be ascertained well in advance to express the. Probability of return as future is Uncertain. It is not at all p
DISCUSS THE APPLICABILITY OF OPERATING CYCLE IN VEGETABLE GROWING.
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