Platoon Company Is Performing a Post-Audit of a Project That

question 18

Essay

Platoon Company is performing a post-audit of a project that was estimated to cost $420,000, have a useful life of 6 years with a zero salvage value, and result in net cash inflows of $100,000 per year. After the investment was in operation for a year, revised figures indicate that it actually cost $470,000, will have a 9-year useful life, and will produce net cash inflows of $77,000. The present value of an annuity of 1 for 6 years at 10% is 4.355 and for 9 years is 5.759.
Instructions
Determine whether the project should have been accepted based on (a) the original estimates and then on (b) the actual amounts.

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Definitions:

Grounded

Mentally and emotionally stable; admirably sensible, realistic, and unpretentious.

Drunk Driving

The act of operating a vehicle while impaired by the effects of alcohol consumption.

Paraphrase

Rewording or summarizing a text or speech to capture the essence of the message in a clearer or simpler manner.

Reflection of Feelings

A counseling technique that involves expressing in words the emotions the client is experiencing, to help them understand and identify their own emotions.