Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as follows: Year 1 Year 2
Assets
Cash $100,000 $(50,000 )
Accounts receivable (net) 50,000 100,000
Inventory 100,000 250,000
Equipment (net) 300,000 350,000
Total assets $550,000 $650,000
Liabilities and Equity Accounts payable $150,000 $100,000
Income taxes payable 80,000 30,000
Bonds payable 100,000 80,000
Common stock 100,000 200,000
Retained earnings 120,000 240,000
Total liabilities and Equity $550,000 $650,000

Using the indirect method to create the operating activities section of the statement of cash flows, the cash flow from accounts receivable would be recorded as:

a. a decrease of $50,000 under investing activities.
b. an increase of $50,000 under investing activities.
c. a decrease of $150,000 under investing activities.
d. an increase of $150,000 under operating activities.

Sonic corp. manufactures ski and snowboarding equipment. it has estimated that this year there will be substantial growth in its sales during the winter months. it approaches the bank for credit. what is the purpose of such credit known as? a. expansion b. inventory building c. debt management d. emergency maintenance

The following selected circumstances relate to pending lawsuits for erismus, inc. erismus’s fiscal year ends on december 31. financial statements are issued in march 2019. erismus prepares its financial statements according to u.s. gaap. required: indicate the amount erismus would record as an asset, liability, or not accrued in the following circumstances. 1. erismus is defending against a lawsuit. erismus's management believes the company has a slightly worse than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,000,000. 2. erismus is defending against a lawsuit. erismus's management believes it is probable that the company will lose in court. if it loses, management believes that damages could fall anywhere in the range of $2,000,000 to $4,000,000, with any damage in that range equally likely. 3. erismus is defending against a lawsuit. erismus's management believes it is probable that the company will lose in court. if it loses, management believes that damages will eventually be $5,000,000, with a present value of $3,500,000. 4. erismus is a plaintiff in a lawsuit. erismus's management believes it is probable that the company eventually will prevail in court, and that if it prevails, the judgment will be $1,000,000. 5. erismus is a plaintiff in a lawsuit. erismus’s management believes it is virtually certain that the company eventually will prevail in court, and that if it prevails, the judgment will be $500,000.

Alpha industries is considering a project with an initial cost of $8 million. the project will produce cash inflows of $1.49 million per year for 8 years. the project has the same risk as the firm. the firm has a pretax cost of debt of 5.61 percent and a cost of equity of 11.27 percent. the debt–equity ratio is .60 and the tax rate is 35 percent. what is the net present value of the project?