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Which of the following actions are most likely to directly increase cash as shown on a firms balance sheet? Explain

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Which of the following actions are most likely to directly increase cash as shown on a firm’s balance sheet? Explain and state the assumptions that underlie your answer.
a. It issues $2 million of new common stock.
b. It buys new plant and equipment at a cost of $3 million.
c. It reports a large loss for the year.
d. It increases the dividends paid on its common stock.

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Statements b and d will decrease the amount of cash on a companys ba…View the full answer


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Fundamentals of Financial Management

Fundamentals of Financial Management

ISBN: 978-0324664553

Concise 6th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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Chapter # 3
Section: Problems
Problem: 4
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Question Posted: October 05, 2011 09:45:58
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