Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please Answer Questions ASAP. Answer Questions in Word Document Attached. Thank you. Questions Need to Be answered ASAP 1. A. What does it mean when

image text in transcribed

Please Answer Questions ASAP. Answer Questions in Word Document Attached. Thank you.

image text in transcribed Questions Need to Be answered ASAP 1. A. What does it mean when cash flow from operations on a company's cash flow statement is negative? Is this bad news? Is it dangerous? B. What does it mean when cash flow from investing activities on a company's cash flow statement is negative? Is this bad news? Is it dangerous? C. What does it mean when cash flow from financing activities on a company's cash flow statement is negative? Is this bad news? Is it dangerous? 2. Braintree Corporation has $5 billion in assets, $4 billion in equity, and earned a profit of $100 million last year as the economy boomed. Senior management proposes paying themselves a large cash bonus in recognition of their performances. As a member of Braintree's board of directors, how would you respond to this proposal? 3. True or false? A. If a company gets into financial difficulty, it can use some of its shareholder's equity to pay its bills for a time. B. It is impossible for firm to have a negative book value of equity without the firm going into bankruptcy. C. If a company increases its dividend, its net income will decreases. D. You can construct a sources and uses statements for 2014 if you have a company's balance sheets for year -end 2013 and 2014. E. The \"goodwill\" account on the balance sheet is an attempt by accountants to measure the benefits that result from a company's public relations efforts in the community. F. A reduction in an asset account is a use of cash, while a reduction in a liability account is a source of cash. 4. Explain briefly how each of the following transactions would affect a company's balance sheet. (Remeber, assets must equal liabilities plus owner's' equity before and after the transactions) A. Sale of used equipment with a book value $300,000 for $500,000 cash. B. Purchase of a new $80 building, financed 40 percent with cash and 60 percent with a bank loan. C. Purchase of a new building for $60 millions cash. D. A $40,000 payment to trade creditors. E. A $firm's repurchase of 10,000 shares of its own stock at a price of $24 per share. F. Sale of merchandise for $80,000 in cash. G. Sale of merchandise for 120,000 on credit. H. Dividend payment to shareholders of $50,000. 8. You manage a real estate investment company. One year ago the company purchases 10 parcels of land distributed throughout the community for $10 million each . A recent appraisal of the properties indicates the five of the parcels are now worth $8 million each, while the other five are worth $16 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company's accounting earnings and its economic earnings in each of the following case. a. The company sells all of the properties at their appraised values today. b. The company sells none the properties. c. The company sells the properties that have fallen in value and keeps the others. D. The company sells the properties that have risen in value and keeps the others. E. After returning from a property management seminar, employee recommends that the company adopt an end - of-year policy of always selling properties that have fallen in value. Thew employee explains that, with this policy, the company will never show a loss on its real estate investments activities. Do you agree with the employee? Why, or why not

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A First Course in Quantitative Finance

Authors: Thomas Mazzoni

1st edition

9781108411431, 978-1108419574

More Books

Students also viewed these Finance questions

Question

Did the prospectus contain material misstatements and omissions?

Answered: 1 week ago