Answer: A non profit organization
Explanation: A non profit organization is an establishment created to perform efficiently and effectively, without necessarily making profit as its aim.
They most times function in the area of humanitarian needs, health and medicine, financially empowering the unemployed in communities.
The non profit organization are most times sponsored by government of nations, international bodies ( such as UN, WHO, UNESCO).
Answer:
-1,185,282.35
Explanation:
The average daily collections are the average number of payments times the average value of a payment, so:
Average daily collections = =355 * 945
Average daily collections = $335,475
The present value of the lockbox service is the average daily receipts times the number of days the collection is reduced, so:
PV = (4 day reduction)( $335,475)
PV = $1,341,900
The daily cost is a perpetuity. The present value of the cost is the daily cost divided by the daily interest rate. So:
PV of cost = (.3*355)/.00068
PV of cost = $106.5/.00068= $156,617.65
The firm should take the lockbox service. The NPV of the lockbox is the cost plus the present value of the reduction in collection time, so:
NPV = $156,617.65 - 1,341,900
NPV = -1,185,282.35
In order to preserve independence, Michael must "Remove himself from the engagement as he considers the offer." (Option B). It is to be noted that this is an internal control problem.
<h3>
What is Independence in this case?</h3>
The absence of situations that jeopardize the internal audit activity's capacity to carry out internal audit tasks objectively is called Independence.
Practically, independence is achieved by ensuring that the internal audit activity has no management control for any of the organization's non-audit functions that are subject to internal audit assessments, and by distancing the internal audit activity's management from the functional oversight of the organization's senior management.
Learn more about internal control:
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Full Question:
Michael was on the ABC Accounting Firm's audit team for the Rasmussen Corporation audit. Rasmussen's officers were so impressed with Michael that they offered him a job as Director of Internal Audit at Rasmussen. What should Michael do in order to preserve independence?
A) Tell his superiors as soon as he has decided whether or not to accept the offer.
B) Remove himself from the engagement as he considers the offer.
C) Pray for divine guidance.
D) If he decides to reject the offer, remove himself permanently from the engagement.
Answer:
This is just an advertisement due to the fact that it misses terms in order to be an offer
Explanation:
To begin with, if we wanted to make that advertisiment a more specifically offer then the manager should add certain conditions and terms in order to make it, like for example the conditions that are necessary in a contract to accept the offer that is being made by the company to the client. Therefore that in order to make that advertisiment an offer it is necessary to add the conditions of the sale that the consumer will have to agree to if he wanted to buy that offer.
Answer:
Stock Y is overvalued and Stock Z is undervalued.
Explanation:
The stock is fairly valued when the required rate of return on the stock is equal to its expected return. If the expected return on the stock is more than the required rate of return, the stock is undervalued and vice versa.
The required rate of return on the stock is calculated under the CAPM approach suing the following formula.
r = rRF + Beta * rpM
Where,
- rRf is the risk free rate
- rpM is the risk premium on market
r of Stock Y = 0.052 + 1.3 * 0.077 = 0.1521 or 15.21%
The required rate of return of Stock Y (15.21%) is more than its expected rate (14.9%) which means the stock is overvalued.
r of Stock Z = 0.052 + 0.95 * 0.077 = 0.12515 or 12.515%
The required rate of return of Stock Z (12.515%) is less than its expected rate (12.8%) which means the stock is undervalued.
