Vincent Products is considering a project that will require an initial investment of $45,000 and is expected to generate future cash flows of $6,000 each year for the next 15 years.
Required: Calculate the payback period in yearsA CPA has been asked to audit financial statements of a a publicly held company for the first time. All preliminary verbal discussions and inquiries among the CPA, the company, the predecessor auditor, and all other necessary parties have been completed. The CPA is now preparing an engagement letter.
Required:
a. List the items that should be included in the typical engagement letter in these circumstances.
b. Describe the benefits derived from preparing an engagement letter.