Our competitive analysis shows that Digby invested in new production facilities, including plant and equipment last year. It appears that

this investment was funded two ways. The first was with bonds that had a face value of $$5,921,293$ at $13\mathrm{.}39\%$ interest. The second was

using equity that amounted to $$57,646,000.$

Assuming a straight line depreciation of $15$ years, I would like to verify which of the effects shown below directly resulted from this

transaction? I$\text{'}$m confident two are correct but I'll let you sort out which ones those are.

Sincerely,

Samantha

Samantha Jorgenson

Board Member, Accounting & Finance $|$ Andrews

Corporation

Choose all responses that apply.

On the Balance sheet, Retained Earnings decreased by $$57,646,000.$

Cash went up when the Bond was issued by $$5,921,293$

On the Balance sheet, Plant and Equipment increased by $$51,725,000$

Cash was drawn from retained earnings to cover the $$57,646,000$ difference between the plant

purchase and bond issue.

Cash went up by $$51,725,000$ when the plant was purchased.

Buying the plant had no net effect on the Cash account. Our initial strategic planning suggests that we will need to boost our talent acquisition efforts next year. From my forecasts, our workforce

needs to grow by $15\%$ next year to achieve our strategic goals. Last year we spent $$750$ per employee on talent acquisition, and we plan

to implement several new initiatives that are likely to increase these costs by $$695.$ I need you to calculate how much our total talent

acquisition costs will be next year.

Thank you!

Rich

Rich Carter

Board Member, Human Resources $|$ Andrews

Corporation

$$1,458,005$

$$1,676,706$

$$1,603,806$

$$1,530,905$I've been reviewing some of the preliminary financial data from a variety of our reports. I noticed that we are charged $$2,195,000$ in

depreciation for Art. From discussions with our board, we predict an increase in depreciation for Art.

I$\text{'}$d like you to communicate the primary effect of this increase to Louis, as well as those on the leadership team in operations. I$\text{'}$m sure

they will be interested in learning what $($if any$)$ impact this will have on our financial statement. You can reply directly to Louis with your

initial response.

Thank you,

Ronald

Ronald Jefferson

Board Member, Accounting & Finance $|$ Andrews

Corporation

Email Louis to inform him that the predicted depreciation increase will decrease net cash from operations

on the cash flow statement.

Email Louis to inform him that the predicted depreciation increase will increase net cash from operations,

which he will see on the cash flow statement.

Email Louis to inform him that the predicted depreciation increase will only impact the balance sheet.

Email Louis to inform him that the predicted depreciation increase will have no impact on the net cash from

operations because depreciation appears in both the cash flow and income statements.