Which items in Table would be affected by the following events? a. There is a rise in
Question:
Which items in Table would be affected by the following events?
a. There is a rise in interest rates.
b. Suppliers demand interest for late payment.
c. Dynamic receives an unexpected bill in the third quarter from the Internal Revenue Service for underpayment of taxes in previousyears.
Transcribed Image Text:
First QuarterSecond Quarter Third Quarter Fourth Quarter New borrowing: Bank loan 100.0 16.0 116.0 0.0 92.4 92.4 0.0 0.0 0.0 0.0 0.0 0.0 2 Stretching payables Total Repayments: Bank loan Stretching payables Total Net new borrowing Plus securities sold Less securities bought Total cash raised 0.0 0.0 0.0 116.0 25.0 0.0 41.0 0.0 16.0 16.0 76.4 0.0 0.0 76.4 20.0 92.4 112.4 112.4 0.0 0.0 112.4 80.0 0.0 80.0 80.0 0.0 87.8 167.8 Note: Cumulative borrowing and security sales 100.0 92.4 25.0 80.0 0.0 25.0 0.0 0.0 62.8 Bank lo an Stretching payables Net securities sold Interest payments Bank loan Stretching payables Interest on securities sold 100.0 16.0 25.0 0.0 0.0 0.0 0.0 141.0 141.0 0.8 0.5 3.8 72.6 76.4 2.5 4.6 0.5 7.6 120.0 112.4 2.0 0.0 0.5 2.5 170.3 167.8 14 15 16 Net interest paid Cash required for operations Total cash required TABLE
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Related Book For
Principles of Corporate Finance
ISBN: 978-0077404895
10th Edition
Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen
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