The

following are statements about the calculation of free cash flow (FCF) and

EBIT:

1. When depreciation expense increases

compared to an earlier period, EBIT decreases but FCF increases.

2. When accounts payable increases compared

to an earlier period, EBIT increases and FCF increases.

3.

When accounts receivable increases

compared to an earlier period, EBIT decreases and FCF increases.

4.

When inventories increase compared to an earlier period, EBIT doesn't change

and FCF decreases.

Which combination is most correct?

The

following are statements about price and value:

1. Price is the amount of money investors

are willing to spend on an asset.

2. Value expresses in dollars the

willingness of investors to invest.

3. The value of an asset depends on its

future expected cash flows

4. When price and value are the same, we

say that an asset is fairly priced

Which combination is most correct?

Question 3.3 (c):

To what extent does the design of Australia’s company income tax system

reflect the core principles of good tax design (that is: efficiency, equity and

simplicity)?

Question 3.3 (b):

How much tax does the company have to pay? (3 marks)

Question 3.3 (a):

What is Kartoons' taxable income? Show your workings. (5 marks)

Question 3.2 (a):

Describe two potential problems that may arise from the

process described above.

Question 3.2 (b):

Recommend two ways that the internal controls for the receipt of

inventory could be strengthened

Question 3.1 (a):

What independence threat(s) do you identify from the

information presented above? Briefly explain your answer in 50 words or less. (

Question 3.1 (b):

Recommend two ways

that AUDITFIX could mitigate (reduce) the risks created by the issue(s)

you identified previously in Question 3.1 (a)

Question 2.2:

You are worried that Lamia Scale Ltd. may have accidentally forgotten to record some transactions during the year. For each of the following transactions, use the response template provided to indicate in the "Impact" column whether the given ratio would have increased, decreased, or not changed if Lamia Scale had recorded the listed transaction. Each transaction's effects should be considered independently. (10 marks: 2.5 marks each) 

(Note: You don't need to show your workings)