(b) ‘EAJ’, which commenced trading on 1 June 2003, is a business services group whose consultants implement three types of application software packages designed to meet the accounting, distribution and manufacturing requirements of its clients. Each consultant specialises in the implementation of one type of application software i.e. accounting, distribution or manufacturing. EAJ does not sell application software packages. EAJ implements application software packages but clients are responsible for purchasing the packages. The following information relates to the year ended 31 May 2006. (1) Each consultation, other than those detailed in notes (4) and (5), is charged at a rate of ￡700 per day for new clients and ￡550 per day for existing clients. Consultants are budgeted to work for 240 days per year. (2) The consultants are each paid a fixed annual salary of ￡50,000. In addition they receive a bonus of 40% of the net value of the fee income generated in excess of budget minus the revenue foregone as a consequence of undertaking remedial consultations (per notes 5 and 8) based on a ‘notional’ rate of ￡700 per consultant day. The bonus is shared equally among the consultants employed by EAJ on 31 May in the year to which the bonus relates. (3) Other operating expenses (excluding the salaries of the consultants) were budgeted at ￡3,600,000. The actual amount incurred was ￡4,500,000. (4) In an attempt to gain new business, consultants may undertake consultations on a ‘no-fee’ basis. Such consultations are regarded as business development activity by the management of EAJ. Each of these consultations is budgeted to take one consultant day. (5) Consultants will sometimes undertake remedial consultations with new clients who experience problems with regard to implementation. Remedial consultations are also provided on a non-chargeable, i.e. ‘no fee’ basis. Each of these consultations requires two consultant days. (6) Since its formation EAJ has had a policy of maintaining staff at a level of 100 consultants on an ongoing basis, irrespective of fluctuations in the level of demand. Required: Using the above information, analyse and discuss the performance of EAJ for the year ended 31 May 2006 under the following headings: (i) Financial performance and competitiveness; (ii) External effectiveness; (iii) Internal efficiency. (15 marks)