Devry ACCT 212 (Financial Accounting)
Week 5
Week 5: Plant Assets and Liabilities Discussion 1
Non-current Assets and Related Liabilities (graded)
In the spotlight about FedEx Corporation, you get a feel for the amount of investment in assets and the resulting liabilities that are required to operate a competitive corporation. Even small businesses require plant, property and equipment to compete and normally rely on some form of debt to finance itself. Let’s start up a company that sells auto parts like Napa or Auto Zone. What assets would we require? How might we finance them?
Week 5: Plant Assets and Liabilities Discussion 2
Raising Capital (“Cash”) (graded)
Bonds are a unique way of financing only available to corporations and governments. It allows them to bypass the middle man, the bank, and therefore save costs of borrowing. They normally make semiannual interest payments on the principal and the principal is due at some time in the future…it is not uncommon for decades to pass before the principal payment is due.
Imagine that you are the CFO of a company looking to raise capital. (This means that the company wants to receive a large, one time influx of cash.) The CEO asks you to recommend if the company should sell bonds or issue more common stock. Which one method would you recommend to raise capital and why?
ACCT212 Course Project 1 (Part A + Part B) Rawls Repair Corporation