If a firm records positive net income for the year and also pays a cashdividend then:Multiple ChoiceThe balance sheet equation must increaseRetained earnings must increaseNone of theseRetained earnings must decreaseThe balance sheet equation must decrease

Balance Sheet equation represents that all assets of the business are equal to its equity and…

Answered: If a firm records positive net income…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Which activity decreases cash? Increasing current liabilities Decreasing fixed assets Increasing long-term debt Decreasing equity
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Which of the following best describes why the predicted incremental earnings arising from a given decision are not sufficient in and of themselves to determine whether that decision is worthwhile? ... O A. They do not tell how the decision affects the firm's reported profits from an accounting perspective. O B. They are not easily predicted from historical financial statements of a firm and its competitors. O C. They do not show how the firm's earnings are expected to change as the result of a particular decision. O D. These earnings are not actual cash flows.
Emerson Electric is engaged in design, manufacture, and sale of a broad range of electrical, electromechanical, and electronic products and systems. The following shows Emerson's net income and net income before extraordinary items for the past 20 years (in millions): Net Year Income Y1 $201.0 Y2 237.7 Y3 273.3 Y4 300.1 Y5 302.9 Y6 349.2 Y7 401.1 Net Income before Extraordinary Items $201.0 237.7 273.3 300.1 302.9 349.2 401.1 Net Year Income Y8 $408.9 Y9 467.2 Y10 528.8 Y11 588.0 Y12 613.2 Y13 631.9 Y14 662.9 Net Income before Extraordinary Items $408.9 467.2 528.8 588.0 613.2 631.9 662.9 Emerson Electric Net Year Income Net Income before Extraordinary Items Y15 $708.1 Y16 Y17 Y18 1,018.5 Y19 1,121.9 Y20 1,228.6 1,228.6 788.5 907.7 $ 708.1 904.4 929.0 1,018.5 1,121.9 Emerson has achieved consistent earnings growth for more than 160 straight quarters (more than 40 years). PROBLEM 2-14 Earnings Management Strategies
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If a firm records positive net income for the year and also pays a cash dividend then: Multiple Choice The balance sheet equation must increase Retained earnings must increase None of these Retained earnings must decrease The balance sheet equation must decrease