provide solutions to these difficult questions

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1. Explain why many taxpayers have a preference for capital gains over earned income when the choice arises.[4 marks]
2. Explain why a company might wish to issue preference shares rather than loan stock. [5 marks]
3. Explain why property companies frequently raise a high proportion of their long term financing from debt rather than from equity. [5 marks]
4. Discuss the difficulties associated with accounting for the depreciation of property, plant and equipment in a company's financial statements.[5 marks]
5. Explain how the shareholder value approach to capital project appraisal relates to more traditional net present value approaches.[5 marks]
6. Goodwill on consolidation arises when a buyer pays more than the book value of the net assets for an investment in a subsidiary. Explain the circumstances in which it might be logical to pay more for a company than its balance sheet indicates that it is worth. [5 marks]
7. Explain the role of the external auditor of a limited company. [5 marks]
8. Explain, using examples, how the directors of a limited company could misleading impression of their company's profitability in the published financial statements.[6 marks]
9. A company has several divisions, each of which operates on a geographical basis and in the same line of business. Divisional managers can submit proposals for capital investment projects for consideration by senior management at head office. An analysis of proposals received in the past three years indicates that some divisional managers submit far more proposals than others and that some divisional managers are consistently more optimistic than others in their proposals. Explain why such behavior might occur and why it creates problems for companies. [5 marks]
10. A company's directors are unable to decide whether to invest in a particular project. Discuss the extent to which a simulation exercise might help them to reach a conclusion. [5 marks]