a. Briefly discuss the financial statement impacts of postponing the purchase of the equipment. Would the market price of the firm’s common stock be affected by any or all of these impacts? Do not assume in your discussion that the postponement will affect revenues or any operating costs, other than depreciation.
b. If the purchase of equipment is postponed briefly discuss how cash flow maybe impacted.
c. Efficient markets assume that stockholder wealth is affected by the amount and timing of cash flows. Which alternate should be considered as more favorate - purchasing before year-end or waiting until the next year? Why?