Module01Solutions - Module 1 M1-20 (10 minutes) ($...

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©Cambridge Business Publishers, 2008 Solutions Manual, Module 1 1-1 Module 1 M1-20 (10 minutes) ($ millions) Assets = Liabilities + Equity $315,920 $304,269 $11,651 Ford receives more of its financing from nonowners ($304,269 million) versus owners ($11,651 million). Its owner financing comprises 3.7% of its total financing ($11,651 million/ $315,920 million). The relatively low level of equity capital is primarily the result of the fact that Ford is actually a blend of two companies: the automotive manufacturing company and the financial subsidiary. The financial subsidiary has a balance sheet similar to that of a bank, that is, relatively little equity capital. The blend of these two operating entities results in a balance sheet that is more dependent on borrowed funds than would be the case if Ford consisted solely of the manufacturing company. M1-24 (20 minutes) a. BS d. BS g. SCF and SE b. IS e. SCF* h. SCF and SE c. BS f. BS and SE i. IS, SE, and SCF * Reduction of cash and the increase in noncash assets will be reflected in the BS as well, but the cash outflow is a SCF account.
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©Cambridge Business Publishers, 2008 Financial Accounting for MBAs, 3rd Edition 1-2 M1-25 (10 minutes) There are many stakeholders impacted by this business decision, including the following (along with a description of how): You as a Manager—your reputation, self-esteem, and potentially your livelihood can be impacted. Creditors and Bondholders—credit decisions based on inaccurate information can occur. Shareholders—buying or selling
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This note was uploaded on 05/12/2010 for the course ACG 5065 taught by Professor Asare during the Spring '08 term at University of Florida.

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Module01Solutions - Module 1 M1-20 (10 minutes) ($...

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