$10-5$

You are newly hired as an accountant for Hill Business Technologies, Inc., a small service business that has no formal capital budgeting system. The president of your company, Janice hill, has requested that you write a memo to her explaining what the internal rate of return method of investment evaluation is$,$ how it differs from the net present value and payback period methods, and why Hill Business Technologies should use the internal rate of return method for capital budgeting purposes instead of either of the other methods. Write the memo. Invent any information you feel is necessary to make your memo complete.

$10-12$

You are an audit partner and a medium sized CPA firm, Kilmer, Kissinger and Kennedy. Several of your larger audit clients have read in the news about the possibility that audit firm rotation might at some time be required and have asked whether they should be prepared to comply with such a requirement in the near future. You have been asked by your partners to prepare a memo for distribution to your firms clients that discusses the pros and cons of such a requirement and your evaluation of the likelihood of its occurrence in the near future. Write the memo, inventing any details you need to make your discussion clear and readable.