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What Is the Change in Cash Balance for a Firm

question 72

Essay

What is the change in cash balance for a firm with the following: $10,000 cash flow from operations,$1,600 cash used for new investment,a reduction in the level of debt of $2,000,$1,000 in cash dividends,and $200 in depreciation expense?

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Definitions:

Business Risk

The potential that a company will have lower than anticipated profits or experience a loss rather than making a profit.

EBIT

Earnings Before Interest and Taxes, an indicator of a company's profitability that excludes interest and income tax expenses.

Federal Regulations

Rules set forth by government agencies to control activities within various industries and protect public interests.

Total Leverage

A measure of a company's combined use of financial and operational leverage.

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