SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
42nd Edition
ISBN: 9780357233306
Author: Maloney
Publisher: Cengage
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Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing ­expense. Others on the planning team believe that some interest cost can be included in the cost of the warehouse, but no one could identify the specific authoritative guidance for this issue. Your supervisor asks you to ­research this issue. Instructions If your school has a subscription to the FASB Codification, log in and prepare responses to the following. Provide Codification references for your responses. a.    Is it permissible to capitalize interest into the cost of assets? Provide authoritative support for your answer. b.    What are the objectives for capitalizing interest? c.    Discuss which assets qualify for interest capitalization. d.    Is there a limit to the amount of interest that may be capitalized in a period? e.…
The Dudumwezi city Council is a considering the introduction of speed trains in order to deal with the problem of traffic congestion in the city. The project will be implemented through the PPP model. Councilors are skeptical about the financial viability of the project and have asked for a financial viability assessment of the project. To this end the council management has engaged a consultant to carry out this assessment. Required:To aid the Councilor’s, explain why it is important to carry out a cash flow analysis in project finance and the five factors that need to be considered when calculating cash flows.
A Town Council has decided to build a new community center to be used for conventions, concerts, and other public events, but considerable controversy surrounds the appropriate size. Many influential citizens want a large center that would be a showcase for the area, but the mayor feels that if demand does not support such a center, the community will lose a large amount of money. To provide structure for the decision process, the council narrowed the building alternatives to three sizes: small, medium, and large. Everybody agreed that the critical factor in choosing the best size is the number of people who will want to use the new facility. A regional planning consultant provided demand estimates under three scenarios: worst case, base case, and best case. The worst-case scenario corresponds to a situation in which tourism drops significantly; the base-case scenario corresponds to a situation in which the town continues to attract visitors at current levels; and the best-case…
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