The Ministry is considering embarking on various projects that will help shape the city and its people's way of living. The council accountants have been given a directive by the treasury to account for all projects using the International Public Sector Accounting Standards (IPSAS). IPAS were developed to assist with public sector accounting and have been adopted to various degrees by different member states of the United Nations (UN) The first project the council is considering is a project for the development of a playpark in the centre of Kabwata Township. They expect to spend an initial investment of K100,000 at the beginning of the project and to generate net cash inflows of K34,432, K39,530, K39,359, and K32,219 at the end of each year over the next 4 years. The initial investment of K100, 000 was allocated to the council by the government through the budgetary allocation process. The allocation was done from money from a Eurobond which is repayable by the end of 2018. Presume the current year is 2016 (a) Explain the scope of Public Sector Accounting [2 marks] (b) Give any Five stakeholders that are interested in public sector accounting systems [5 Marks] (c) Calculate the payback period of the play park project [5 Marks] (d) Explain whether the investment is viable given the Eurobond payment year and the payback period calculated above. [2 marks] (e) Which Two Acts of Parliament provide rules for the accounting of public sector entities? [2 marks] (1) Calculate the internal rate of return for the play park project [12 Marks) (9) Based on the IRR, should the project be embarked on if the cost of capital is 16% [2 marks] The Ministry is considering embarking on various projects that will help shape the city and its people's way of living. The council accountants have been given a directive by the treasury to account for all projects using the International Public Sector Accounting Standards (IPSAS). IPAS were developed to assist with public sector accounting and have been adopted to various degrees by different member states of the United Nations (UN) The first project the council is considering is a project for the development of a playpark in the centre of Kabwata Township. They expect to spend an initial investment of K100,000 at the beginning of the project and to generate net cash inflows of K34,432, K39,530, K39,359, and K32,219 at the end of each year over the next 4 years. The initial investment of K100, 000 was allocated to the council by the government through the budgetary allocation process. The allocation was done from money from a Eurobond which is repayable by the end of 2018. Presume the current year is 2016 (a) Explain the scope of Public Sector Accounting [2 marks] (b) Give any Five stakeholders that are interested in public sector accounting systems [5 Marks] (c) Calculate the payback period of the play park project [5 Marks] (d) Explain whether the investment is viable given the Eurobond payment year and the payback period calculated above. [2 marks] (e) Which Two Acts of Parliament provide rules for the accounting of public sector entities? [2 marks] (1) Calculate the internal rate of return for the play park project [12 Marks) (9) Based on the IRR, should the project be embarked on if the cost of capital is 16% [2 marks]
