Project #8693 - Corporate Finance

1.      Changes in the Cash Account. Indicate the impact of the following corporate actions on cash, using the (I) for an increase, (D) for a decrease, or (N) when no change occurs.

a.      A dividend is paid with funds received from a sale of debt.

b.      Real estate is purchased and paid for with short-term debt.

c.      Inventory is bought on credit.

d.      A short-term bank loan is repaid.

e.      Next year’s taxes are prepaid.

f.       Sales are made on credit.

g.      Interest on long-term debt is paid.

h.      Payments for previous sales are collected.

i.       The accounts payable balance is reduced.

j.       A dividend is paid.

k.      Production supplies are purchased and paid for with a short-term note.

l.       Utility bills are paid.

m.    Cash is paid for raw materials purchased for inventory.

n.      Marketable securities are purchased.

 

3.      Changes in the Operating Cycle. Indicates the effect that the following will have on the operating cycle. Use the letter (I) to indicate an increase, the letter (D) for a decrease, and the letter (N) for no change.

a.      Average receivables go up.

b.      Credit payment times for customers are increased.

c.      Inventory turnover goes from 3 times to 7 times.

d.      Payable turnover goes from 6 times to 11 times.

e.      Receivables turnover goes from 7 times to 9 times.

f.       Payments to suppliers are accelerated.

Subject Business
Due By (Pacific Time) 07/08/2013 12:00 am
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