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Section A (10 points) Q1. The following events relate to a set of transactions that took place in DXB Corporation. Explain these events in the
Section A (10 points) Q1. The following events relate to a set of transactions that took place in DXB Corporation. Explain these events in the light of principles for Corporate Finance. a. The Finance manager added salaries expense accrued to operating expenses in the income statement. The accountant argued that salaries expense accrued should not be considered for Income Statement. b. A fund manager invested $50,000 now to receive $60,000 two years later. The rate of interest on the investment is 8% p.a. with annual compounding. The fund manager is confident that the desired amount will be available after two years. A common stockholder is demanding the payment of dividend in a financial year. The finance manager has considered it as a legal obligation. d. An accountant has deducted a Depreciation of $10,000 from Net Income to determine the retained earnings. e. A finance manager argued that the firm can use debt or equity to finance a project as both these sources of funds lead to tax benefit. c
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