Listed below are six transactions that Dynamic Mattress might make. Indicate how each transaction would affect
(a) Cash and
(b) Working capital.
The transactions are
i. Pay out an extra $10 million cash dividend.
ii. Receive $2,500 from a customer who pays a bill resulting from a previous sale.
iii. Pay $50,000 previously owed to one of its suppliers.
iv. Borrow $10 million long term and invest the proceeds in inventory.
v. Borrow $10 million short term and invest the proceeds in inventory.
vi. Sell $5 million of marketable securities for cash.