Question
Our competitive analysis shows Digby invested in new production facilities and it was funded in two ways. The first was with bonds that had a
Our competitive analysis shows Digby invested in new production facilities and it was funded in two ways. The first was with bonds that had a face value of $5241,789 at 12.27 interest. The second was using equity that amounted to $52867000. Assuming a straight line of depreciation for 15 years what TWO of these are true ? (PLEASE SHOW ALL CALCULATIONS OR REASON)
Buying the plant had no net effect on the cash account
Cash went up when the Bond was issued by $5,241,789
Cash was drawn from retained earnings to cover the $52,867,000 difference between the plant purchase and bond issue.
Cash went up by $47,625,000
On the balance sheet, plant and equipment increased by $47,625,000
On the balance sheet, retained earnings decreased by $52,867,000
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