There are 5 questions and I am absolutely stumped with my #'s. Please show work in an excel spreadsheet or MS Word. Assume RAH uses these statements for both financial reporting and tax purposes and that it sold no assets during 2015. Compute the cash flows for 2015 using:

(1) the financial statement of cash flows with notes payable as an operating liability (i.e., included in the concept of Net Working Capital)

(2) the accounting statement of cash flows with notes payable as an operating liability, as above.

(3) describe RAH's underlying activities as depicted in the two statements above. Did assets grow or shrink? If assets grew, where did the funds come from? If assets shrank, where did the money go?

(4) Assume that at the end of 2015 RAH is now operating at full capacity, and that its profitability, asset usage and dividend policy are well represented by the 2015 financial statements. How fast can RAH grow if it seeks no more external financing (debt or equity) but maintains its dividend policy? (State as a percentage to 1 decimal point.)

(5) Under the same assumptions as (4), how fast can RAH grow if it only seeks additional debt financing in the amount necessary to keep its debt/equity ratio constant?

This is due Monday at 9am

FINC6601 Module 03 CASH FLOWS & GROWTH Fall 2017 Due: E-submission: 6:00 p.m., Monday, October 09, 2017 Type of Assignment: This is an individual assignment but you can seek assistance of others provided that you do the computations yourself and write up your own work. Deliverables: 1. An MSWord document or MSExcel worksheet containing the answers to the questions below. Your document should include your name in the text as well as a neat and professional set of answers. 2. Use the naming convention \"Last name_first initial_HW04.docx\". For example, if I were turning in this assignment it would have the name \"Highfield_R_HW04.docx\". Post your document on Blackboard by the due date. Purpose: To provide specific practice in computing the actual cash flows contained in standard accounting statements. In this problem we will be considering two different ways to state cash flows: the financial statement of cash flows and the accounting statement of cash flows. In this problem we will view Notes Payable as part of Net Working Capital, i.e., as an operating liability. RAH Industries has the following financial statements for 2014 and 2015. RAH's stock has no par value. The firm paid a dividend in 2015 of $600 million. Long-term debt of $300 million was retired in 2015. RAH also issued stock and long-term debt in 2015. Balance Sheet as of December 31, 2014 ($millions) Cash 2,200 Accounts Payable Accounts Receivable 6,100 Notes Payable Inventory 5,183 Current Liabilities Current Assets 13,483 2,912 3,900 6,812 Gross Fixed Assets Less: Accumulated Depr. Net Fixed Assets 9,100 Total Assets FINC\t6601\tModule\t03\tAssignment 42,025 10,655 31,370 44,853 Long-term Debt Common Stock Less Treasury stock Retained Earnings Total Owners' equity Total Liabilities and Equity 12,110 900 17,731 28,941 44,853 Page\t1 Balance Sheet as of December 31, 2015 ($millions) Cash 2,325 Accounts Payable Accounts Receivable 6,435 Notes Payable Inventory 5,990 Current Liabilities Current Assets 14,750 Gross Fixed Assets Less: Accumulated Depr. Net Fixed Assets Total Assets 45,300 11,275 34,025 48,775 2,928 4,252 7,180 Long-term Debt 10,500 Common Stock Less Treasury stock Retained Earnings Total Owners' equity Total Liabilities and Equity 13,172 930 18,853 31,095 48,775 2015 Income Statement ($millions) Revenue COGS and administrative expenses Depreciation Expense EBIT Interest EBT Taxes Net Income 8,654 4,723 620 3,311 702 2,609 887 1,722 Questions: There are 5 questions. Assume RAH uses these statements for both financial reporting and tax purposes and that it sold no assets during 2015. Compute the cash flows for 2015 using (1) the financial statement of cash flows with notes payable as an operating liability (i.e., included in the concept of Net Working Capital) (2) the accounting statement of cash flows with notes payable as an operating liability, as above. (3) Write a paragraph describing RAH's underlying activities as depicted in the two statements above. Did assets grow or shrink? If assets grew, where did the funds come from? If assets shrank, where did the money go? (4) Assume that at the end of 2015 RAH is now operating at full capacity, and that its profitability, asset usage and dividend policy are well represented by the 2015 financial statements. How fast can RAH grow if it seeks no more external financing (debt or equity) but maintains its dividend policy? (State as a percentage to 1 decimal point.) (5) Under the same assumptions as (4), how fast can RAH grow if it only seeks additional debt financing in the amount necessary to keep its debt/equity ratio constant? FINC\t6601\tModule\t03\tAssignment Page\t2