Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pls answer asap,tq Read the case below and answer the question that follows: Three years ago the government entered into a contract with Permata Berhad

Pls answer asap,tq
image text in transcribed
Read the case below and answer the question that follows: Three years ago the government entered into a contract with Permata Berhad to build an integrated entrepreneur centre in a rural area in Kedah. The idea was to improve the economic well-being of the local communities and to boost the tourism industry. The centre will accommodate a daily fresh and dry market, shophouses, cafeteria, training centres and medium-sized multi-purpose hall with complete facilities. Various programmes were planned to be carried out at the centre, including local trade exhibitions, career and technical classes, seminars and discussion forums. The project is part of a master plan to expand community centres within the country. The project was supposed to be completed within two years. The budget allocated for the project was RM 50 million. To build the centre, the current fresh and dry market have to be renovated and an open area where small enterprise set-up their stalls will need to be abolished and temporarily relocated. At the early stage when the idea was mooted, the government was faced with resentment from the local businesses as they have established their businesses for almost 25 years and are afraid of losing their customers if they have to be relocated. A few negotiations were held among the concerned parties and the government managed to convince the business owners to accept the idea. They will be compensated with RM1,000 per month until the project is completed. However the project suffered problems which resulted in Permata Berhad being replaced with another developer, Berlian Berhad. Since Berlian Berhad had to do a few major reconstructions of the centre, the government had to increase its allocation for the project by RM5 million. In addition, the government also faced legal charges pressed by Permata Berhad who claimed that the government has breached the contract. The legal costs and extension of compensation payments to the business owners had caused the government to incur RM10 million additional costs. Required: Critically discuss THREE (3) ways in which the features embedded in outcome-based budgeting would have prevented the issues in the case from arising. (30 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

7th Edition

978-0470477151, 978-0-470-5562, 470556242, 0-470-55624-2, 9780470556245, 978-0470507018

More Books

Students also viewed these Accounting questions

Question

Prepare a review of a technical paper on U-lines.

Answered: 1 week ago