The annual report of Starbucks is presented in Appendix A.

\section*{Instructions}

Answer these questions:

(a) What information about investments is reported in the consolidated balance sheet?

(b) Based on the information in Note 3 to Starbucks' financial statements, what is the nature of Starbucks' short-term investments?

(c) What effect did interest income on investments have on Income Before Income Taxes in 1996 ?

(d) Judging from the statement of cash flows, did cash flows from investing activities increase or decrease in 1996, and by how much? What item changed the most?

(e) Based on the information under Liquidity and Capital Resources in Management's Discussion and Analysis of Financial Condition and Results of Operations: (1) What types of investments were made in 1996? (2) Does management expect investing activity to increase or decrease in 1997? (3) Does management expect its cash resources to be sufficient for these plans?

(f) Note 5 to Starbucks' financial statements describes a number of \(50-50\) joint ventures that the company has entered into. How is each of these joint ventures being accounted for? What was the effect of each of these joint ventures on 1996 net income?