Question 01
Explain the role of auditors in assuring that the information in the financial statements reflects the economic activities in the business. (2 marks). Include in your explanation the process of forming the audit opinions and its significance. (5 marks)
Question 02
The White Bear Group (WBG) is thinking of building a plant. The plant will be used to process and ultimately dispose of the chemical residue from its production of fertiliser.
i.The cost of building the plant is estimated at $1,000,000 and is expected to save the cost of using the third party disposal facility of $220,000 per year. The building is estimated to have a useful life of 10 years, and it will have 100,000 disposal value. The required rate of return is 12%.
[TASK 1] Compute the net present value and payback period for this investment. (Present value is provided below)
[4 marks]
[TASK 2] Based on your answers in TASK 1, should WBG build the plant? What is your recommendation to WBG?
[4 marks]
ii.There is a debate in the senior management team of WBG on this proposal, where several senior managers oppose the idea of building the plant. Their main argument is that the plant will emit a mixture of tiny particles and gases to the air, which could pollute the air quality of the surrounding area. Additional investment might be needed to control the level of emission and prevent WBG from any legal actions from the authority.
[TASK 3] What would be your response to this issue? In light of the point raised by the opposing senior managers, evaluate your recommendation in TASK 2.
[6 marks]
Q AutoSave O OFF ~ H . C G E ... ACW1020_ Main Exam _2021 Semester One_final Share Comments Home Insert Draw Design Layout References Mailings Review View ? Tell me Aav AaBbCcDdEe AaBbCcDdEe AaBbCcDc aBbCcDdEE AaBb( AaBbCCDdEE AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe Times New... v 12 Strong Dictate Sensitivity Normal No Spacing Heading 1 Heading 2 Title Subtitle Subtle Emph Emphasis Intense Emp.. styles Pane Paste B Uvab A PRESENT VALUE OF $1 RATE PER PERIOD 9.00% 10.00% 11.00% 12.00% 0.25% 0.50% 0.75% 1.00% 1.50% 2.00% 2.50% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 0.99010 |0.98522 0.98039 0.97561 |0.97087 0.96154 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.99751 0.99502 0.99256 |0.98517 0.98030 0.97066 0.96117 0.95181 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.99502 0.99007 0.97059 0.95632 0.94232 0.92860 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.73119 0.71178 0.99254 0.98515 0.97783 0.99006 0.98025 |0.97055 0.96098 0.94218 0.92385 0.90595 0.88849 0.85480 |0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.92826 0.90573 0.88385 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.98759 0.97537 0.96333 0.95147 0.56447 0.53464 0.50663 0.98513 0.97052 0.95616 0.94205 0.91454 0.88797 0.86230 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.94904 0.93272 0.90103 0.87056 0.84127 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.98267 0.96569 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.98022 0.96089 0.94198 0.92348 0.88771 0.85349 0.82075 0.95610 |0.93496 0.91434 0.87459 0.83676 0.80073 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.97778 0.32197 10 0.97534 0.95135 0.92800 0.90529 0.86167 0.82035 0.78120 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 11 0.97291 0.94661 0.92109 0.89632 0.84893 0.80426 0.76214 0.72242 0.64958 0.58468 0.83639 0.78849 0.74356 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35553 0.31863 0.28584 0.25668 12 0.97048 0.94191 0.91424 0.88745 0.72542 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 13 0.96806 0.93722 0.90743 0.87866 0.82403 0.77303 0.20462 14 0.96565 0.93256 0.90068 0.86996 0.81185 0.75788 0.70773 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.89397 0.86135 0.79985 0.74301 0.69047 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 15 0.96324 0.92792 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0. 16312 16 0.96084 0.92330 0.88732 0.85282 0.78803 0.72845 0.67362 0.71416 0.65720 0.60502 0.51337 |0.43630 0.37136 0.31657 0.27027 0.23107 0. 19784 0. 16963 0.14564 17 0.95844 0.91871 0.88071 0.84438 0.77639 0.25025 0.21199 0.17986 0. 15282 0.13004 18 0.95605 0.91414 0.87416 0.83602 0.76491 0.70016 0.64117 0.58739 0.49363 0.41552 0.35034 0.29586 0.62553 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0. 19449 0.16351 0.13768 0.11611 19 0.95367 0.90959 0.86765 0.82774 0.75361 0.68643 0.86119 0.81954 0.74247 0.67297 0.61027 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 20 0.95129 0.90506 0.29416 0.24151 0. 19866 0.16370 0.13513 0.11174 0.09256 21 0.94892 0.90056 0.85478 0.81143 0.73150 0.65978 0.59539 0.53755 0.43883 0.35894 0.22571 0.18394 0.15018 0.12285 0.10067 0.08264 22 0.94655 0.89608 0.84842 0.80340 0.72069 0.64684 0.58086 0.52189 0.42196 0.34185 0.27751 0.21095 0.17032 0.13778 0.11168 0.09069 0.07379 23 0.94419 0.89162 0.84210 0.79544 0.71004 0.63416 0.56670 0.50669 0.40573 0.32557 0.26180 24 0.94184 0.88719 0.83583 0.78757 0.69954 0.62172 0.55288 0.49193 0.39012 0.31007 0.24698 0. 19715 0.15770 0. 12640 0.10153 0.08170 0.06588 0. 14602 0.11597 0.09230 0.07361 0.05882 25 0.93949 0.88277 0.82961 0.77977 0.68921 0.60953 0.53939 0.47761 0.37512 0.29530 0.23300 0.18425 30 0.86103 |0.79919 0.74192 0.63976 0.55207 0.47674 0.41199 0.30832 0.23138 0.17411 0.13137 0.09938 0.07537 0.05731 0.04368 0.03338 0.92783 0.04899 0.03558 0.02592 0.01894 35 0.91632 0.83982 0.76988 0.70591 0.59387 0.50003 0.42137 0.35538 0.25342 0.18129 0.13011 0.09366 0.06763 40 0.90495 0.81914 0.74165 0.67165 0.55126 0.45289 0.37243 0.30656 0.20829 0.14205 0.09722 0.06678 0.04603 0.03184 0.02209 0.01538 0.01075 0.00542 0.00346 50 0.88263 0.77929 0.68825 0.60804 0.47500 0.37153 0.29094 0.22811 0.14071 0.08720 0.05429 0.03395 0.02132 0.01345 0.00852 Page 12 of 12 Focus 164% Page 12 of 12 2468 words X English (Ur tates)