Use your answer to (ii) above to explain why the need to publish annual financial statements might discourage company directors from investing in positive net present value projects? the theory explained is not clear , please explain why it might discourage director from investing in positive NPV regards Suresh sharma
The restated accounts and analysis in (ii) show that making an investment mid-year can make the company look less profitable or appear to be wasting resources. The accounts are only a snapshot at a point in time. Simply comparing these figures to the prior year may be misleading as investments may not have had time to start generating revenue.
