Excel Audit Consultants (EAC) have engaged three audit trainees; Odhiambo, Koech and Mwai. After three months,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Excel Audit Consultants (EAC) have engaged three audit trainees; Odhiambo, Koech and Mwai. After three months, the audit supervisor notices that 3%, 5% and 4% of the accountants audited by Odhiambo, Koech and Mwai respectively have some procedural errors. The supervisor had distributed the accounts such that Odhiambo audited 40%. Koech audited 30% and Mwai audited 30% of the accounts. Required: (0) () The proportion of audited accounts with procedural errors. The probability that an account with an error is audited by either Koech or Mwai. (c) The finance manager of Apar Construction Ltd. has two investment proposals before him and he wishes to choose one of them. He will choose the project that offers him a higher expected net present value (NPV). In case both projects have the same NPV, he will prefer the project that has a lesser risk. The data for the two projects is given below: Possible outcomes Project X: Pessimistic Most likely Optimistic Project Y: Pessimistic Most likely Optimistic Probability of possible outcomes 0.25 0.50 0.25 0.25 0.50 0.25 Net present value Sh. million 1,500 5,000 9,000 - 10,000 5,000 20,500 Required: The project the finance manager would choose, given that risk is measured by the standard deviation. Excel Audit Consultants (EAC) have engaged three audit trainees; Odhiambo, Koech and Mwai. After three months, the audit supervisor notices that 3%, 5% and 4% of the accountants audited by Odhiambo, Koech and Mwai respectively have some procedural errors. The supervisor had distributed the accounts such that Odhiambo audited 40%. Koech audited 30% and Mwai audited 30% of the accounts. Required: (0) () The proportion of audited accounts with procedural errors. The probability that an account with an error is audited by either Koech or Mwai. (c) The finance manager of Apar Construction Ltd. has two investment proposals before him and he wishes to choose one of them. He will choose the project that offers him a higher expected net present value (NPV). In case both projects have the same NPV, he will prefer the project that has a lesser risk. The data for the two projects is given below: Possible outcomes Project X: Pessimistic Most likely Optimistic Project Y: Pessimistic Most likely Optimistic Probability of possible outcomes 0.25 0.50 0.25 0.25 0.50 0.25 Net present value Sh. million 1,500 5,000 9,000 - 10,000 5,000 20,500 Required: The project the finance manager would choose, given that risk is measured by the standard deviation.
Expert Answer:
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0136126638
13th Edition
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
The accountant of Laburnum Ltd is preparing documents for a forthcoming meeting of the budget committee. Currently, variable cost is 40 per cent of selling price and total fixed costs are 40 000 per...
-
Modify BST to add a method rangeCount() that takes two keys as arguments and returns the number of keys in a BST between the two specified keys. Your method should take time proportional to the...
-
Story Park competes with Splash World by providing a variety of rides. Story sells tickets at $50 per person as a one-day entrance fee. Variable costs are $10 per person, and fixed costs are $240,000...
-
Suppose that \(\left\{\mu_{i j} ight\}\) satisfy a multiplicative model \[\begin{equation*}\mu_{i j}=\mu \alpha_{i} \beta_{j}, \quad 1 \leq i \leq I, 1 \leq j \leq J \tag{7.30}\end{equation*}\] where...
-
In a nutritional products plant, a plate heat exchanger cools infant formula by approximately \(25{ }^{\circ} \mathrm{C}\) from an inlet temperature of \(68{ }^{\circ} \mathrm{C}\) as it flows...
-
In an attempt to increase tax revenues, legislators in several states have introduced legislation that would increase state excise taxes. Examine the impact of such an increase on the equilibrium...
-
Green began dating Quintana in October 2002. Unbeknownst to Green, Quintana was married to Vanderbilt. Quintana returned to Vanderbilt after the Thanksgiving holiday and lived with him and their four...
-
Assume that the Siletz River data are lognormally distributed. Find the following. (a) Peak flow of the 100-yr flood (b) Peak flow of the 50-yr flood (c) Probability that a flood will be less than or...
-
Haunted Forest, Inc.is selling fog machines. Use the following information about Haunted Forest, Inc. to answer the following questions. Average selling price per unit $309. Variable cost per unit...
-
Fill in the blank fields in this text: List all the Snap points available on a circle (ex. Line: endpoint, midpoint, nearest):...
-
The Autodesk A360 App, for mobile devices, is expensive. A) True B) False
-
The Options Bar dynamically changes to show options that complement the current operation. A) True B) False
-
Fill in the blank field in this text: Specifying degrees with the Rotate tool, you must type the number when Revit does not display the number you want; the increments shown on-screen are set in the...
-
Entering 16 for a distance actually means 16'-0" to Revit. A) True B) False
-
Johan's trial balance at 30 September 2022 is as shown below: Capital at 1 October 2021 Stock at 1 October 2021 Accounts receivable Accounts payable and accruals Bank Sales Returns inward Purchases...
-
Figure displays a 12.0 V battery 3 four uncharged capacitors of capacitances C1 = 4.00F, C2 = 6.00F, and C3 = 3.00F. The switch is thrown to the left side until capacitor 1 is fully charged. Then the...
-
CVP analysis, sensitivity analysis Hoot Washington is the newly elected leader of the Republican Party. Media Publishers is negotiating to publish Hoots Manifesto, a new book that promises to be an...
-
Division managers compensation, levers of control (continuation of 23-32). Murdoch Turner seeks your advice on revising the existing bonus plan for division managers of News Mogul Group. Assume...
-
A component part should be purchased whenever the purchase price is less than its total manufacturing cost per unit. Do you agree? Why?
-
Discuss how group norms are formed and sustained within groups.
-
Explain how group cohesiveness is developed and sustained.
-
Explain what behavior is displayed by a group that is engaging in groupthink.
Study smarter with the SolutionInn App