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2 . You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters ( where all of the firm s records

2. You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the firms records are kept) has been destroyed by fire. So, your first job will be to recreate the firms cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. It earned $5million in net income during the year but paid $800,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.5 million of machinery that was needed for a new project. You have just spoken to the firms accountants and learned that annual depreciation expense for the year is $450,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. What was the firms end of year cash balance? Recreate the firms cash flow statement to arrive at your answer

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