Company A's gross profit percentage has fallen from 70% to 61 % Which of the following possible explanations would most concern the internal auditors?
Select the correct ethical principle that corresponds to each ethical dilemma described.


S is a senior production manager for LK, which is about to set up a new production line requiring S4 million of new specialist equipment.
S's daughter goes to school and is friends with the daughter of R.
the sales manager in GG. GG is a potential supplier of the specialist equipment that LK requires.
R owns a holiday home. S's daughter regularly accompanies R's daughter on family vacations at this holiday home, all at R's expense.
S is the only person working for LK who is qualified to select the specialist equipment. GG will definitely bid for the sale.
What should S do?
A capital investment project shows a NPV of £3,450 at a discounted rate of 8% and an NPV of £1,210 at a discounted rate of 9%.
What is the internal rate of return?
B uses a balanced scorecard to monitor the performance of its divisions.
Classify each of the following decisions taken by a division's management team as either commercially sound or dysfunctional.

