In this scenario, Finance is facing a negative cash position. Currently the department is both issuing and retiring $6,000 of long-term debt. Use the sliders below to reassess the company's financing decisions and protect against an Emergency Loan. Task Question You have invested $6,000 in plant improvements and financed $6,000 Long-Term debt to pay for it. You have also elected to retire $6,000 of Long- Term Debt. Now, your closing cash position reads -$3,000. Retire Long Term Debt $0 Issue Long Term Debt $0 $3,600 $6,000 Closing Cash Position Hint $10,000 $10,000 ($5,400) Submit Total Raised Capital: $6,000 Cash Flow Starting Cash Position January 1, 2019 Cash from Operating Cash from Investing Cash from Financing Dividends Paid Issue Stock . Retire Stock .Net Change in Cument Debt Issue Long-Term Debt Retire Long Term Debt Closing Cash Position December 31, 2019 Total Spent Capital: $6,000 $3,431 ($6,431) $0 $0 50 50 50 50 $6,000 ($6,000) ($3,000) Click to Expand "X
In this scenario, Finance is facing a negative cash position. Currently the department is both issuing and retiring $6,000 of long-term debt. Use the sliders below to reassess the company's financing decisions and protect against an Emergency Loan. Task Question You have invested $6,000 in plant improvements and financed $6,000 Long-Term debt to pay for it. You have also elected to retire $6,000 of Long- Term Debt. Now, your closing cash position reads -$3,000. Retire Long Term Debt $0 Issue Long Term Debt $0 $3,600 $6,000 Closing Cash Position Hint $10,000 $10,000 ($5,400) Submit Total Raised Capital: $6,000 Cash Flow Starting Cash Position January 1, 2019 Cash from Operating Cash from Investing Cash from Financing Dividends Paid Issue Stock . Retire Stock .Net Change in Cument Debt Issue Long-Term Debt Retire Long Term Debt Closing Cash Position December 31, 2019 Total Spent Capital: $6,000 $3,431 ($6,431) $0 $0 50 50 50 50 $6,000 ($6,000) ($3,000) Click to Expand "X
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 29P
Related questions
Question
![In this scenario, Finance is facing a negative cash position. Currently the department is both issuing and retiring $6,000 of long-term debt. Use the sliders
below to reassess the company's financing decisions and protect against an Emergency Loan.
Task Question
You have invested $6,000 in plant improvements
and financed $6,000 Long-Term debt to pay for it.
You have also elected to retire $6,000 of Long-
Term Debt. Now, your closing cash position reads
-$3,000.
Retire
Long
Term Debt $0
Issue
Long
Term Debt $0
$3,600
$6,000
$10,000
$10,000
Closing Cash Position ($5,400)
Hint Submit
Total Raised Capital: $6,000
Spence
0
Starting Cash Position
January 1, 2019
Cash Flow
Cash from Operating
Cash from Investing
Cash from Financing
. Dividends Paid
• Issue Stock
. Retire Stock
.Net Change in Cument Debt
• Issue Long-Term Debt
. Retire Long-Term Debt
Closing Cash Position
December 31, 2019
Total Spent Capital: $6,000
$3,431
($6,431)
$0
SO
$0
$0
$0
$0
$6,000
($6,000)
($3,000)
K
Click to Expand✓
Incorrect!
The $6,000 Long-Term Debt you initially issued
was a solid financial decision to pay for
operations (plant improvements). Borrowing any
more, or less is avoiding the real issue - it is
generally bad practice to borrow and pay-back at
the same time. Try something else.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2a1aaec1-0669-4d25-aef6-e5777f277d6d%2F5a36267e-d870-41b2-9eaf-5de10e7d4da8%2Fx51nz0h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In this scenario, Finance is facing a negative cash position. Currently the department is both issuing and retiring $6,000 of long-term debt. Use the sliders
below to reassess the company's financing decisions and protect against an Emergency Loan.
Task Question
You have invested $6,000 in plant improvements
and financed $6,000 Long-Term debt to pay for it.
You have also elected to retire $6,000 of Long-
Term Debt. Now, your closing cash position reads
-$3,000.
Retire
Long
Term Debt $0
Issue
Long
Term Debt $0
$3,600
$6,000
$10,000
$10,000
Closing Cash Position ($5,400)
Hint Submit
Total Raised Capital: $6,000
Spence
0
Starting Cash Position
January 1, 2019
Cash Flow
Cash from Operating
Cash from Investing
Cash from Financing
. Dividends Paid
• Issue Stock
. Retire Stock
.Net Change in Cument Debt
• Issue Long-Term Debt
. Retire Long-Term Debt
Closing Cash Position
December 31, 2019
Total Spent Capital: $6,000
$3,431
($6,431)
$0
SO
$0
$0
$0
$0
$6,000
($6,000)
($3,000)
K
Click to Expand✓
Incorrect!
The $6,000 Long-Term Debt you initially issued
was a solid financial decision to pay for
operations (plant improvements). Borrowing any
more, or less is avoiding the real issue - it is
generally bad practice to borrow and pay-back at
the same time. Try something else.
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