Sam's Company has been reporting better-than-average financial indicators for many years. A financial analyst suspects that the company has been using several financial techniques and contractual arrangements to achieve such performance. With an investigation for about a year, the financial analyst has following findings: 1. The company usually issues zero coupon bonds for financing while par bonds are usually used by other companies in the industry. 2. Several leases on premises are intentionally structured as operating leases but are more similar to capital leases recognized in the industry. 3. The company regularly sells its accounts receivables to commercial banks at 90% of the face value. The transaction is recognized as a collection of account receivables with the difference between the amounts received and face value recorded as operating expenses. However, it is found that the company has the responsibility to repay all loses arising from the account receivable after the sale to the bank. For the following issues, explain whether there are any impacts on (1) total debts, (ii) interest expense and (iii) cash flows from operation. Also suggest the corresponding adjustments for financial analysis on the affected items. a. The use of zero coupon bonds instead of par bonds for financing. (10 marks) b. Recognize the capital leases as operating leases. (10 marks) c. Recognize the sale of accounts receivable with recourse (i.e. the responsibility to repay all loses arising from the account receivable after the sale) as a collection of receivables. (10 marks)