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Impact on Cash Balance

1. Balance sheet - Which of the following actions are most likely to directly increase cash 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 equipment at a cost of $3million.
c. It reports a large loss for the year.
d. It increases the dividends paid on its common stock.

Solution Summary

The solution explains which actions would result in an increase in cash balance.