Chapter 5 Solutions.docx - Chapter 5 Solutions Questions 1 A 2 F 3 B 4 A Exercise 1 Cash Flows From Financing Bank Loan 500,000 Dividends Paid(50,000

# Chapter 5 Solutions.docx - Chapter 5 Solutions Questions 1...

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Chapter 5 Solutions: Questions: 1. A 2. F 3. B 4. A Exercise 1: Exercise 2: The total loan received and the principal portion of payments should be classified in financing act ivities. The interest portion of payments should be classified in operating activities. Monthly Payments = 3,029.90, made up of interest and principal. Exercise 3: Cash Flows From Financing: Bank Loan: 500,000 Dividends Paid: (50,000) Net Cash Inflow: 450,000 Cash Flows from Operations: Interest Paid: (8,287.73) Cash Flows from Financing: Receipt of Loan: 500,000 Payment of Principal: (6,861.77) Cash Flows from Financing: Issuance of Ordinary Share: 250,000 Principal Portion of Lease Payments: (3,600) Long-Term Debt Repayment: (75,000) Net Cash Inflow: 171,400

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Exercise 4: Exercise 5: Case: Students will access the most recent annual report available on each company s public website for two automobile manufacturers, Daimler AG () and Fiat S.p.A. ( ). After reviewing the annual report for each company, respond to the following questions: 1. Consider the statement of cash flows of each company. What were three major cash outflows for
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