(a) Project A returns a net present value of $50,000 and generates an IRR of 9%. Interpret the meaning of these two results highlighting any connection between the NPV and IRR. (limit 80 words)

(b) Prepaid Insurance is considered a current asset. With reference to asset definition and recognition criteria describe why Prepaid Insurance is an asset and secondly why it is classified as a current asset. (limit 70 words)

(c) Compare the major purpose and informational content of the balance sheet, income statement and cash flow statement. (80 words limit)

(d) “The carrying amount of a fixed asset (Cost less accumulated depreciation) measures the market value of the asset.” Discuss, stating whether you agree or disagree with the statement and why. (40 words limit).

(e) Discuss the major considerations when choosing between using straight line, units of production and reducing balance methods of depreciation under accrual accounting (60 words)

(f) Organizations providing credit to a company structure, such as suppliers selling goods on credit and banks loaning money, take on greater risk due to limited liability of stakeholders. Describe the concept of limited liability and discuss three legal safeguards that assist such third parties to minimize their potential risk of not being repaid amounts owing. (60 words limit)

Answer rating: 100% (QA)

a The NPV of 50000 suggests that Project A is expected to generate a positive return after accounting for the cost of capital The IRR of 9 indicates t... View the full answer