Dynamic Mattress
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Chapter 19: Problem 1
1. Working Capital Management. : Indicate how each of the following six different transactions that Dynamic Mattress might make would affect (i) cash and (ii) net working capital
a. Paying out a $2 million cash dividend.
b. A customer paying a $2,500 bill resulting from a previous sale.
c. Paying $5,000 previously owed to one of its suppliers.
d. Borrowing $1 million long-term and investing the proceeds in inventory.
e. Borrowing $1 million short-term and investing the proceeds in inventory.
f. Selling $5 million of marketable securities for cash.
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This solution is comprised of a detailed explanation to indicate how each of the following six different transactions that Dynamic Mattress might make would affect (i) cash and (ii) net working capital.
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Working Capital Management. Indicate how each of the following six different transactions that Dynamic Mattress might make would affect (i) cash and (ii) net working capital:
a. Paying out a $2 million cash dividend.
Cash and net working capital will decrease.
b. A customer paying a $2,500 bill resulting ...
Purchase this Solution
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