Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

problem 1:

a) What is the underlying rationale for applying Discounting Cash Flow in project appraisal?
 
b) With short term interest rate at 7 percent, MauriSys Ltd decided to invest Rs 200 million out of its 2002 [year] retained earnings to acquire rights from OmegaSoft Products to monitor tourism performance. The marketing department submitted a report to Karina Zinta and estimated sales to be Rs 70 million for each of the three years of the life of the project. Sales revenue was Rs 70 million in 2006 and rose to Rs 71 million in 2007 when sales were halted pending an intellectual property right [IPR] infringement filed by Five-A Global Solutions, a foreign software firm. MauriSys lost the suit in 2008. The Court ordered it to pay damages of Rs 17 million to Five-A Global Solutions. Karina Zinta, the Managing Director, felt she was fired over the incident. Shortly afterwards Karina Zinta was heard saying “I’m a scapegoat. The attorneys at Maurisys did not do their homework. They should have checked the IPR. I projected annual sales of Rs 70 million per year for three years. Actual sales exceeded set targets for 2007 and those for 2008 would have at least been equal to the figure of 2002.”
 
Can you think why Karina Zinta was fired?

c) Aloha Solutions Ltd is envisaging the purchase of a new machine at the cost of half million rupees. The cost of capital is 10%. The machine has a useful life of eight years with a scrap value of Rs 75,000 at the end of its life. The machine will yield a stream of benefits of Rs 75, 000 during each of the first two years, and Rs 100,000 for each of the remaining years. Should the manager purchase the machine? Give reasons and show your calculations. What will be your recommendation if the scrap value cannot be sold?

problem 2:

a) Critically examine the salient features of the project approach to manage resources.

b) Which appraisal methods would you advise for public sector projects and why?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M96108

Have any Question? 


Related Questions in Financial Accounting

Cambridge manufacturing company applies manufacturing

Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $286,000 and machine hours to be 14,300. Act ...

David files his tax return 45 days after the due dat along

David files his tax return 45 days after the due dat. Along with the return, David remits a check for $40,00 which is the balance of the tax owed. Disregarding the interest element, David's total failure to file and pay ...

Cardco inc has an annual accounting period that ends on

Cardco Inc. has an annual accounting period that ends on December 31. During the current year a depreciable asset that cost $43,500 was purchased on September 2. The asset has a $4,300 estimated salvage value. The compan ...

Sund corporation bases its budgets on the activity measure

Sund Corporation bases its budgets on the activity measure “customers served”. During April, the company plans to serve 38,000 customers. The company has provided the following data concerning the formulas it uses in its ...

Lauras father albert gave laura a gift of 500 shares of

Laura's father, Albert, gave Laura a gift of 500 shares of Green Corporation common stock in the current year. Albert's basis for the Green stock was $10,000. At the date of this gift, the fair market value of the Green ...

Part level submission the results of operations for the

(Part Level Submission) The results of operations for the Preston Manufacturing Company for the fourth quarter of 2014 were as follows: Sales $ 500,000 Less variable cost of sales 300,000 Contribution margin 200,000 Less ...

Ratio computations and analysis prior companys condensed

(Ratio Computations and Analysis) Prior Company's condensed financial statements provide the following information, PRIOR COMPANY BALANCE Sheet   Dec, 31, 2014 Dec, 31, 2013 Cash $           52,000 $      60,000 Accounts ...

Inventory information for part 311 of monique aaron corp

Inventory information for Part 311 of Monique Aaron Corp. discloses the following information for the month of June. June 1 Balance 304 units @ $13 June 10 Sold 205 units @ $31 11 Purchased 801 units @ $16 15 Sold 497 un ...

When an agent acts for an undisclosed principal the

When an agent acts for an undisclosed principal, the principal will not be liable to third parties if the: principal seeks to conceal the agency relationship. agent acts within an implied grant of authority. principal ra ...

A alex rodriguez a publishing company is preparing its dec

A. Alex Rodriguez, a publishing Company, is preparing its Dec. 31, 2008, financial statements and must determine the proper accounting treatment for the following situations. A. Rodriguez sells subscriptions to several m ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate