Alpha Corporation

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Alpha Corporation

Question 1)
Assumption: Only transactions above 50 millions are considered as major transactions. a) 1989:
i. Sources of Cash: Net cash provided by continuing operations, Proceeds from disposal of depreciable and other assets, Increase in short-term borrowings, Proceeds from long-term debt. ii. Uses of Cash: Investment in depreciable assets, Investment in capitalized software, Payments of long-term debt.

b) 1990:
i. Sources of Cash: Net Cash provided by continuing operations, Proceeds from disposal of depreciable and other assets, Proceeds from the sale of discontinued operations, Proceeds from long-term debt. ii. Uses of Cash: Investment in depreciable assets, Decrease in short-term borrowings, Payments of long-term debt.

c) 1991:
i. Sources of Cash: Net Cash provided by continuing operations, Proceeds from disposal of depreciable and other assets. ii. Uses of Cash: Investment in depreciable assets, Payments of long-term debt.

Question 2)
a) 1989: Cash flow from Operations is greater than the Net Income. The major reason for this is that noncash expenses such as Depreciation, Amortization, Working Capital Adjustment, and Reclassification of Cash flow from Operating activities to Investment activities were considered for the evaluation of Net Income.

b) 1990: Cash flow from Operations is greater than the Net Income. The major reason for this is that noncash expenses such as Depreciation, Amortization, Working Capital Adjustment, and Reclassification of Cash flow from Operating activities to Investment activities were considered for the evaluation of Net Income.

c) 1991: Cash flow from Operations is greater than the Net Income. The major reason for this is that noncash expenses such as Depreciation, Amortization, and Working Capital Adjustment were considered for the evaluation of Net Income.

Question 4: Did the cash flow from operations cover both the capital expenditures and the...
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