1. Road Runner Ltd is a lawn mowing and gardening business. The workers have been attacked by guard dogs in the past resulting in injured workers and increased medical costs for the company. Road Runner Ltd now refuses all lawn mowing or gardening contracts where the client has a dog. The firm’s risk exposure to this source of cost is what and why? Hint: look at the risk response model on page 2 of this assignment.
2. Papa Smurf Ltd does home remodeling and repair. The firm hires sub-contractors to do the installation of drainage pipes because there are often problems with the installation resulting in leaks when it rains and also the materials themselves often require costly post-installation services. The firm’s risk exposure to this source of cost is what and why?
3. If available, a 3.3% discount for payment within 10 days instead of 30 days represents an approximate savings of what % annually?
4. A control procedure designed so that the employee that records cash received from customers does not also have access to the cash itself is an example of what sort of control?
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