(Solution Download) The president of Fallen Down Gold Mines stated The company


The president of Fallen Down Gold Mines stated, "The company does not have sufficient cash to pay its $2 million dividend in 2010." During his speech, he said that cash inflows from operations are expected to be $2,500,000, cash outflows from investing are expected to be $(1,400,000), and cash inflows from financing are expected to be $500,000.
Required:
(a) How might you determine whether the president's statement is accurate?
(b) What is the minimum amount of the opening cash balance required in order to pay the $2 million dividend and remain with a cash balance of $350,000 at the end of this year?

 







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