You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all

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You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by are. So, your first job will be to recreate the firm's cash flow state­ment for the year just ended. The firm had 5100,030 in the bank at the end of the prior year, and Its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid 5800,000 in dividends to com­mon shareholders. Throughout the year, the firm purchased $5.5 million of property, plant, and equipment—the majority having a useful life of more than 20 years and falling under dr alternative depreciation system. You have just spoken to the firm's accountants and leamoi that annual depreciation expense for the year is 5450,030. The purchase price for the property, plant, and equipment represents additions before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of St million at a 6% interest rate. What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to ante, at your answer.

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Fundamentals Of Financial Management

ISBN: 9781337902571

Concise 10th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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