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Which of the following actions are most likely to directly increase cash as shiewn on a firm's balance sheet? Select the appropriate assumptions that underlie your answeri. a. It issues $4 million of new cormmon stock. b. It buys new plant and equipment at a cost of $3 miltion. c. It reports a large loss for the year. d. It increases the dividends paid on its common stock. 1. Statements (b), (c), and (d) will increase the amount of cash on a company's balance sheet. Statement (a) will decrease cash through the sale of common stock 5elling stock uses cash from finanoing activithes. Note that net operating losses are carried forvard to future years increasing income and, as a result, cash in the current year. 11. Statements (b) and (d) will increase the amount of cash on a company's balance sheot. Statement (a) wit increase cash through the sale of commen stock. 5elling stock provides cash through financing activities. Net operating losses are carried forward to future years to reduce taxable income in those years, reduce taxes, and thus increase cash flow - but the immediate effect in the current year is to reduce cash. Therefore, statement (c) will decrease the ameunt of cash on a company's balance sheet III Stotements (b), (c), and (d) will decrease the amount of cash on a company's balance sheet. statement (a) will increase cash through the saie of commion stock. 5elling stock prevides cash through financing activites. Note that net operating losses are carried forward to future years to reduce taxable income in those years, reduce taxes, and thus increase cash fow - but the immediate effect in the current year is to reduce cash. IV. Statements (b) and (d) will decrease the amount of cash on a company's balance sheet. statement (a) will decrease cash through the sale of common stock, Selling stock uses covi from finanding activities, Net operating losses are carried forward to future vears increasing income and, as a resul, cash in the current vear, Therefore. statement (c) will increase the amount of cash on a company's balance sheet. vi Statements (b) and (d) will decrease the ameunt of cash on a company's balance sheet, Statement (a) will increase cash through the sale of common stock. Selling steck provides cash through financing activities. Statement (c) would neither incresse or decrease cash for taxes paid in a prior vear

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