Question 4

Bay View Real Estate Development is a company that owns and operate a number of real estate ventures. The company also engage in real estate acquisitions and sale of properties, some of which are properties the company no longer wishes to operate. Similar real estate firms earn a 15 percent rate of return . Bay View reported the following earning over the last five years.

YearIncome AssetNet Income $$$11,500,000800,0002,300,00021,700,000900,0002,600,00031,800,000200,0002,000,00041,900,000(500,000)1,400,00052,000,000(200,000)1,800,000

Required.

1. Prepare a business valuation of the Bay View Real Estate Development company giving greater weight to the more recent earning (Where five is more recent).
2. Discuss the consequence of unethical behaviors in the accounting profession.