ORIE_350_Homework__1_Solutions_2008

ORIE_350_Homework__1_Solutions_2008 - ORIE 350 Homework #1...

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Unformatted text preview: ORIE 350 Homework #1 (1.14 Reebok; retained earnings relations.) (Amounts in Millions) Retained Net Dividends Retained Earnings at + Income Declared = Earnings at End of Year 11 for Year 12 for Year 12 End of Year 12 $411 + $52 ? = $446 Dividends declared during Year 12 totaled $17 million. (1.16 Yahoo, Inc.; cash flow relations.) (Amounts in Millions) Cash at Cash Flow Cash Flow Cash Flow Cash at End of + from + from + from = End of Year 11 Operations Investing Financing Year 12 $373 + $303 + ($346) + ($19) = ? Cash at the end of Year 12 totaled $311 million. (1.17 Nike; cash flow relations.) (Amounts in Millions) Cash at Cash Flow Cash Flow Cash Flow Cash at End of + from + from + from = End of Year 11 Operations Investing Financing Year 12 $575.5 + $917.4 + ? + ($643.3) = $634.0 The net cash outflow for investing for Year 12 totaled $215.6 million. 1-1 Solutions (1.18 Preparing a personal balance sheet.) There is no distinction between contributed capital and retained earnings, because an individual does not issue common stock. The excess of assets over liabilities is called an individual's net worth . The methods used in valuing an individual's assets and liabilities are critical variables in determining net worth. Possibilities include acquisition cost, current replacement cost, current selling price, and others. As long as the student obeys the relation A = L +OE, they should get full points (unless there are some outlandish errors that I cant think of!) (1.20 Lowes; balance sheet relations.) a. The given (boldface) and missing items appear below (amounts in millions). Year 9 Year 10 Year 11 Year 12 Current Assets............................. $ 2,586 $ 3,710 $ 4,175 $4,920 b Noncurrent Assets....................... 3,759 5,302 7,201 8,816 Total Assets................................. $ 6,345 $ 9,012 $ 11,376 $ 13,736 Current Liabilities...................... $ 1,765 $ 2,386 $ 2,929 a $ 3,017 Noncurrent Liabilities................ 1,444 1,931 2,952 4,045 Shareholders Equity................... 3,136 4,695 5,495 6,674 Total Liabilities and Share- holders' Equity........................ $ 6,345 $ 9,012 $ 11,376 $ 13,736 a $2,929 = $4,175 $1,246....
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ORIE_350_Homework__1_Solutions_2008 - ORIE 350 Homework #1...

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