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Consider a company called Extra, specialised in providing advice to start-ups. Extra records the following transactions during a given fortnight. Extra receives $100,000 payment for
Consider a company called Extra, specialised in providing advice to start-ups. Extra records the following transactions during a given fortnight. Extra receives $100,000 payment for services it just provided to start-ups (transaction 1); Extra pays its employees $60,000 (transaction 2 ); Extra buys back $30,000 worth of shares in the secondary market from Babasuper, a superannuation fund (transaction 3 ), shares that Extra had issued in the past for $40,000; Extra pays $2,000 coupons on bonds (transaction 4 ) it had issued in the past. All transactions are done through a transactional bank account. transaction). No explanations are required. (5 marks) relevant. (2 marks) c. Have past retained profits funded the buy back of the shares? Explain your answer in depth. (1 mark)
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