June’s Camera Shop sells cameras and photographic supplies of all types to retail customers. June’s also repairs cameras and provides color prints. To compete with other camera departments, June’s offers fast, efficient, and effective repairs and photographic processing. For fiscal 2011 and 2010, June’s accountant prepared the following statements of cash flows:
1. Does June’s Camera Shop appear to have grown (in terms of property, plant, and equipment) during the past two years?
2. June’s president, June Smith, would like to open a second store. Smith believes that $225,000 is needed to equip the facility properly. The business has $100,000 of cash and liquid investments to apply toward the $225,000 required. Do the data in the 2011 and 2010 statements of cash flow suggest whether or not June’s Camera Shop is likely to be able to secure a loan for the remaining $125,000 needed for the expansion?
3. How long should it take June’s Camera Shop to pay back the $125,000?

  • CreatedSeptember 22, 2015
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