Exercise 7-7 - Exercise 7-7(30 minutes Net Income NE NE...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exercise 7-7 (30 minutes) Net Cash from Cash Income operations position 1. NE NE + 2. NE NE + 3. + + + 4a. - NE NE 4b. NE (1) + (2) + (2) 4c. - + (2) + (2) 5. NE + + 6. - + (long-run -) + (long- run -) 7. - - (5) + 8. + NE NE 9. + (3) + (4) + (4) 10. NE + + 11. + + + 12. NE NE + 13. NE NE + (1) Deferred tax accounting. (2) Depends on whether tax savings are realized in cash. (3) If profitable. (4) If accounts receivable collected. (5) Depends on whether interest is paid or accrued. Further explanations (listed by proposal number): 1. Substituting payment in stock for payment in cash for its dividends will not affect income or CFO but will increase cash position. 2. In the short run, postponement of capital expenditures will save cash but have no effect on income or CFO. In the long term, both income and CFO may suffer due to lower operating efficiency.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Exercise 7-7—continued 3. Cash not spent on repair and maintenance will increase all three measures. However, the skimping on necessary discretionary costs will adversely impact future operating
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/02/2011 for the course FINA 470 taught by Professor Austin during the Spring '11 term at South Carolina.

Page1 / 3

Exercise 7-7 - Exercise 7-7(30 minutes Net Income NE NE...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online