sources and Uses of Cash. How would each of the following events would affect the firm's balance sheet. State whether each change is a source or use of cash. (LO3) a. An automobile manufacturer increases produc- tion in response to a forecast increase in demand. Unfortunately, the demand does not increase. b. Competition forces the firm to give customers more time to pay for their purchases. C. The firm sells a parcel (area) of land for $100,000. The land was purchased 5 years earlier for $200,000.
sources and Uses of Cash. How would each of the following events would affect the firm's balance sheet. State whether each change is a source or use of cash. (LO3) a. An automobile manufacturer increases produc- tion in response to a forecast increase in demand. Unfortunately, the demand does not increase. b. Competition forces the firm to give customers more time to pay for their purchases. C. The firm sells a parcel (area) of land for $100,000. The land was purchased 5 years earlier for $200,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
sources and Uses of Cash. How would each of
the following events would affect the firm's balance
sheet. State whether each change is a source or use
of cash. (LO3)
a.
An automobile manufacturer increases produc-
tion in response to a
Unfortunately, the demand does not increase.
b.
Competition forces the firm to give customers
more time to pay for their purchases.
C.
The firm sells a parcel (area) of land for $100,000.
The land was purchased 5 years earlier for
$200,000.
d.
The firm repurchases its own common stock.
e.
The firm pays its quarterly dividend.
f. The firm issues $1 million of long-term debt and
uses the proceeds to repay a short-term bank loan.
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