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Question 5 a) WTL manufactures and sells two types of supercomputers. Because of increasing demand for the business's products, the directors have decided to
Question 5 a) WTL manufactures and sells two types of supercomputers. Because of increasing demand for the business's products, the directors have decided to acquire new plant and machinery and expand production. There are two main long-term finance options (ordinary shares and long-term borrowings) that managers can use to finance the new plant and machinery. Discuss these sources of finance highlighting the advantages and disadvantages of each source. b) Explain the following: i. Historic cost ii. Prudence or Conservatism iii. Monetary measurement iv. Faithful representation V. Comparability (8 marks) (2 marks) (3 marks) (2 marks) (3 marks) (2 marks) (Total: 20 marks)
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