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Penco Ltd’s board of directors are looking into expanding the company’s business operations. Before investing in a new product, the board conducted one focus group, and based on this one bit of feedback, invested $5m of company funds to develop the product. Within two years, the company had lost $8m due to poor sales. Shareholders are furious and wish to hold directors personally liable for this loss. Analyse the likely outcome for directors if shareholders were to accuse the board of breaching CA s 180.

Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?   Group of answer choices Since the firm's director of capital budgeting spent some of her time last year to evaluate the new project, a portion of her salary for that year should be charged to the project's initial cost. The company spent and expensed $10 million on a marketing study before its current analysis regarding whether to accept or reject the project. The firm would borrow all the money used to finance the new project, and the interest on this debt would be $1.5 million per year. The new project is expected to reduce sales of one of the company's existing products by 5%. The company has spent and expensed $1 million on R&D associated with the new project.

The senior VP in charge has asked that you make a recommendation for the purchase of new equipment.Ideally, the company wants to limit its capital investment to $500,000. However, if an asset meritsspending more, an investment exceeding this limit may be considered. You assemble a team to helpyou. Your goal is to determine which option will result in the best investment for the company. Toencourage capital investments, the government has exempted taxes on profits from new investments.This legislation is to be in effect for the foreseeable future.The average reported operating income for the company is $1,430,500.The company uses an 11% discount rate in evaluating capital investments.The team is considering the following optionsOption 1:The asset cost is $300,000.The asset is expected to have an 8-year useful life with no salvage value.Straight-line depreciation is used.The net cash inflow is expected to be $62,000 each year for 8 years.A significant portion of this asset is made from…

e. Of the following, the most significant risk factor relating to the risk of misstatement arising from fraudulent financial reporting for SSC is that: Multiple Choice Company officers serve on the board of directors. The company must refinance a significant portion of its debt. The company operates in the Bisbee, Arizona, area. The company paid no dividend this year. Untitled docume...pdf Untitled docume....pdf docx Presentation se....pdf Untitled docume...pdf 身

The president of southern tagalog corporation made this statement in the company's annual report as this is primary goal is to increase the value of our common stockholders equity later report the following announcement the company contributed 1.5 million pesos to the symphony orchestra the spending 500 million pesos to open a new plant at expand operations no profits will be produced by the operation for four years so earnings will be depressed during this period versus what day would have been had the decision been made not to expand letter c the company holds about half of its assets in the form of government treasury bonds and it keeps a this funds available for use in emergencies in the future though stc plans to shift its emergency funds from treasury bonds to common stocks discuss how stc stakeholders might view each of these actions and how the actions might affect the stock price

accounting

The City of Bainland has been undergoing financial difficulties because of a decrease in its tax base caused by corporations leaving the area. On January 1, 2017, the city has a fund balance of only $400,000 in its governmental funds. In 2016, the city had revenues of $1.4 million and expenditures of $1.48 million. The city's treasurer has forecast that, unless something is done, revenues will decrease at 2 percent per year while expenditures will increase at 3 percent per year. Required Create a spreadsheet to predict in what year the government will have a zero fund balance. One proposal is that the city slash its expenditures by laying off government workers. That will lead to a 3 percent decrease in expenditures each year rather than a 3 percent increase. However, because of the unemployment, the city will receive less tax revenue. Thus, instead of a 2 percent decrease in revenues, the city expects a 5 percent decrease per year. Adapt the spreadsheet created in requirement (1) to…

The Fritz Co. is considering a new project and asked the chief accountant to review potential changes to the net working capital accounts should the project be adopted. The accountant’s report is as follows: Current Projected Inventory $ 99,218 $ 75,000 Accounts receivable $ 89,430 $110,000 Accounts payable $ 58,640 $ 50,000 What amount should be included in the initial cash flow of the project for net working capital?

Question When the FASB issues new standards, the implementation date is frequently 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in a fairer presentation of the Company’s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. Required: a. What, if any, ethical issue is involved in this case? b. Is the financial vice president acting improperly or immorally? c. What does Hoger have to gain by advocacy of early implementation? d. Who might be affected by the decision against early implementation? (CMA adapted)

CRISIS IT In May 2007, Frontier Airlines Holdings hired Gerry Coady as chief information officer (CIO). Nearly a year later the airline filed for bankruptcy under Chapter 11. In an interview, Coady describes how he managed IT projects during the bankruptcy and recession crisis of 2008–2009.   Fundamentally, Coady faced a situation of too many projects and too few resources. Coady used a strategy of focusing on reducing the number of projects in the portfolio. He put together a steering committee of senior management that reviewed several hundred projects. The end result was a reduction to less than 30 projects remaining in the portfolio.   How Can You Get to a Backlog of over 100 Projects? “There are never enough resources to get everything done.” Backlogs build over time. Sacred cow projects get included in the selection system. Projects proposed from people who have left the airline still reside in the project portfolio. Non-value-added projects somehow make their way into the…

ETHICS (Rule-Making Issues) When the FASB issues new pronouncements, the implementation date is usually12 months from date of issuance, with early implementation encouraged. Karen Weller, controller, discusses with her financialvice president the need for early implementation of a rule that would result in a fairer presentation of the company’s financialcondition and earnings. When the financial vice president determines that early implementation of the rule will adversely affectthe reported net income for the year, he discourages Weller from implementing the rule until it is required.   InstructionsAnswer the following questions.(a) What, if any, is the ethical issue involved in this case?(b) Is the financial vice president acting improperly or immorally?(c) What does Weller have to gain by advocacy of early implementation?(d) Which stakeholders might be affected by the decision against early implementation?

44.  A company has suffered operating losses for some time but is now operating profitably and expects to continue to do so. Current and projected income, however, will not be sufficient to eliminate the deficit in the near term.  It also appears that plant assets are overstated considering current prices and economic conditions. After receiving permission from government authorities and approval from the shareholders, the board of directors of Boeing Corporation decided to restate the company’s assets and paid-in capital balances in order to remove the deficit.  A balance sheet for the company just prior to this action is presented as follows: A Company   Statement of Financial Position For the year ended December 31, 2021   Current assets P   250,000 Property, plant and equipment                               1,500,000 Accumulated Depreciation (600,000) Total assets P 1,150,000     Liabilities P   300,000 Ordinary Shares, 10 par, 100,000 shares…

The president of Semiconductor Manufacturing International Corporation made this statement in the company’s annual report: “United’s primary goal is to increase the value of the common stockholders’ equity over time.” Later in the report, the following announcements were made: a. The company contributed $1.5 million to the symphony orchestra in San Francisco, where it is headquartered. b. The company is increasing its relative use of debt. Whereas assets were formerly financed with 35 percent debt and 65 per-cent equity, henceforth the financing mix will be 50–50. c. The company has been paying out half of its earnings as dividends and retaining the other half. Henceforth, it will pay out only 30 percent as dividends. Discuss how  Semiconductor Manufacturing International Corporation stockholders, customers, and the labor force will react to each of these actions and then explain how each action might affect United’s stock price.

State the accounting assumption, principle, qualitative characteristic, constraint or violation that is most applicable in the following cases. (examples of the answer: Faithful representation, Completeness, etc). COVID Co. could disseminate its annual financial statements three days earlier if it shifted substantial human resources from other operation to the annual report project. Management decided the value of the earlier report was not worth the added commitment of resources. Answer:

The board of directors of General Wheels Co. is considering seven large capital investments. These investments differ in the estimated long-run profit (NPV) that they will generate as well as in the amount of capital required, as shown by the following table. Investment Opportunity Estimated Profit (millions) Capital Required (millions) A $17 $43 10 28 15 34 19 48 7 17 13 32 9. 23 The total amount of capital available for these investments is $100 million. Investment opportunities A and B are mutually exclusive, and so are C and D. Furthermore, neither C nor D can be undertaken unless one of the first two opportunities is undertaken. There are no such restrictions on investment opportunities E, F, and G. The objective is to select the combination of capital investments that will maximize the total estimated long- run profit (NPV). Formulate the model on a spread and solve using Solver. Give the following: i. Objective function: Maximize NPV = ii. Optimal combination of investment…

The investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $1,104,000. The estimated net cash flows from each project are as follows:   Net Cash Flow Year     OfficeExpansion     Server 1 $308,000       $407,000       2 308,000       407,000       3 308,000       407,000       4 308,000       407,000       5 308,000               6 308,000               The committee has selected a rate of 15% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $385,000. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5…

The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows:   Warehouse   Tracking Technology Year Income fromOperations Net CashFlow   Income fromOperations Net CashFlow 1 $44,000   $145,000     $92,000   $232,000   2 44,000   145,000     70,000   196,000   3 44,000   145,000     35,000   138,000   4 44,000   145,000     15,000   94,000   5 44,000   145,000     8,000   65,000   Total $220,000   $725,000     $220,000   $725,000     Each project requires an investment of $440,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683…