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QUESTION THREE CASH FLOW (24 POINTS)
II. The following information is available for the Ehrens Corporation:

   

   
Additional information: 
(1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired.
(2) Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3) New equipment was purchased for $67,550 cash.
REQUIRED:
1.Prepare a complete statement of cash flows for calendar-year 2010.

2. What life cycle is this business in?
3. How are they financing their growth and do you agree with their approach?  
 	








QUESTION TWO
The Owners of the Ehren’s corporation have approached you, their banker for a loan. They would like
To  borrow $100,000 on a term loan. 
Using appropriate ratios form table 5.8 in the text, analyze Ehrens; financial position and comment
On whether you would loan them the $100,000 or not.