Question
You are reading the 2017 annual report of MNL Corporation and you find the following items in its footnotes. 1. The useful life of machinery
You are reading the 2017 annual report of MNL Corporation and you find the following items in its footnotes. 1. The useful life of machinery has been increased from 10 to 15 years. 2. The expected rate of return on plan assets has been increased to 10% from 8%. 3. The company has started to capitalize small tools purchased beginning in 2017.
Required: For each of the above, determine the effect (higher, lower, or unchanged) of the change on the ratios listed below for the year 2017 with explanation: a. Debt-to-equity b. Return on assets c. Cash Flow from operations
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