Consider the following potential events that might have occurred to Global on December30, 2016. For eachone, indicate which line items inGlobal's balance sheet would be affected and by how much. Also indicate the change toGlobal's book value of equity.

1)Global used$20.9million of its available cash to repay$ 20.9million of itslong-term debt. (Select the best choicebelow.)

A.Long-term liabilities would increase by$ 20.9million, and cash would increase by the same amount. The book value of equity would be unchanged.

B.Long-term liabilities would decrease by$20.9million, and cash would decrease by the same amount. The book value of equity would be unchanged.

C.Long-term liabilities would decrease by$20.9million, and cash would decrease by the same amount. The book value of equity would change by$20.9.

D.Long-term liabilities would decrease by$20.9million, and cash would increase by the same amount. The book value of equity would be unchanged.

2) A warehouse fire destroyed$5.1million worth of uninsured inventory. (Select the best choicebelow.)

A.Inventory would increase by$5.1million, and the book value of equity would decrease by the same amount.

B.Inventory would increase by$5.1million, as would the book value of equity.

C.Inventory would decrease by$5.1million, and the book value of equity would be unchanged.

D.Inventory would decrease by$5.1million, as would the book value of equity.

3)Global used$4.7million in cash and$4.9million in newlong-term debt to purchase a$9.6

million building. (Select the best choicebelow.)

A.Long-term assets would increase by$9.6million, cash would increase by$4.7million, andlong-term liabilities would increase by$4.9

million. There would be no change to the book value of equity.

B.Long-term assets would decrease by$9.6million, cash would increase by$4.7

million, andlong-term liabilities would decrease by$4.9million. There would be no change to the book value of equity.

C.Long-term assets would increase by$9.6million, cash would decrease by$4.7million, andlong-term liabilities would increase by$4.9

million. There would be no change to the book value of equity.

D.Long-term assets would decrease by$9.6million, cash would decrease by$ 4.7million, andlong-term liabilities would increase by$ 4.9million. There would be no change to the book value of equity.

4). A large customer owing$ 3.1million for products it already received declaredbankruptcy, leaving no possibility that Global would ever receive payment. (Select the best choicebelow.)

A.Accounts receivable would increase by$3.1million, as would the book value of equity.

B.Accounts receivable would decrease by$3.1million, and the book value of equity would increase by the same amount.

C.Accounts receivable would decrease by$3.1million, as would the book value of equity.

D.Accounts receivable would increase by$3.1million, and the book value of equity would decrease by the same amount.

5). Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than53 %(Select the best choicebelow.)

A.This event would decrease inventory by over53 %and the book value of equity would decrease by the same amount.

B.This event would decrease inventory by over53%and the book value of equity would increase by the same amount.

C.This event would decrease inventory by over53%

D.This event would not affect the balance sheet.

6). A key competitor announces a radical new pricing policy that will drastically undercutGlobal's prices. (Select the best choicebelow.)

A.This event would decrease the book value of equity.

B.This event would decrease inventory.

C.This event would not affect the balance sheet.

D.This event would affect the balance sheet in an unpredictable manner.