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Indicate the change to globals book value of equity
Course:- Business Economics
Reference No.:- EM13891957




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Consider the following potential events that might have taken place at Global Conglomerate on December 27, 2012. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. (In all cases, ignore any tax consequences for simplicity.) (a) Global used $15 million of its available cash to repay $15 million of its long-term debt. (b) A warehouse fire destroyed $4 million worth of uninsured inventory. (c) Global used $3 million in cash and $3 million in new long-term debt to purchase a $6 million building. (d) A large customer owing $2 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. (e) Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by over 50%. (f) A key competitor announces a radical new pricing policy that will drastically undercut Global's prices.




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