Use the Table for the Question(s)below

question 104

Multiple Choice

Use the table for the question(s) below.
Statement of Financial Position

-If the above statement of financial position is for a retail company,what indications about this company would best be drawn from the changes in shareholders' equity between 2014 and 2015?

• A)The company is very profitable because it is obviously collecting receivables faster.
• B)The company is selling its property,plant,and equipment,which may result in a long-term deficiency in production capacity.
• C)The company's net income in 2015 was negative.
• D)The company's enterprise value declined.
• E)The company has experienced a significant rise in its market value.

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Definitions:

Present Value

The value in present terms of a sum of money or cash flows due in the future, determined with a set rate of return.

Future Cash Receipts

Expected inflow of cash to a business as a result of its operational activities, investments, or financing.

Installment Note Payment

Payments made regularly on a loan that includes both interest and a portion of the principal.

Interest Portion

The part of a payment or financial obligation that represents the cost of borrowing or the charge for the service of using someone else's money.