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Can one of you geniuses answer the follwoing question for me, please? Other things held constant,...

Can one of you geniuses answer the follwoing question for me, please? Other things held constant, which of the following actions would increase the amount of cash on a company's balance
sheet? And Explanation why?
A. The company issues new common stock.
B. The company purchases a new piece of equipment.
C. The company pays a dividend.
D. The company gives customers more time to pay their bills.

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Answer #1

A - this increases the amount of cash on a company's balance sheet because when new common stock is issued, cash is received from investors in exchange for the common stock.

B is incorrect - Purchasing equipment involves paying cash to the supplier of equipment. This is a cash outflow, and hence decreases the amount of cash on a company's balance sheet.

C is incorrect - Paying a dividend means distributing the available cash to shareholders. As this is a cash outflow, it decreases the amount of cash on a company's balance sheet.

D is incorrect - Giving customers more time to pay their bills means that the receivables take longer to be realized in cash. This will not increase the amount of cash.

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