Which of the following best describes the valuation principle?
a. it is not possible to compare costs and benefits that occur at different points in time, in different currencies, or with different risks.
b. the value of a commodity or an asset to a firm or its investors is determined by its competitive market price. when the value of the benefits exceeds the value of the costs in terms of market prices, the decision will increase the market value of the firm.
c. if equivalent goods or securities trade simultaneously in different markets across the world, they will trade for the same price.
d. the rate at which we can exchange money today for money in the future by borrowing or investing is the current market interest rate and is same across all banks.

You have just been hired as a financial analyst for barrington industries. unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. so, your first job will be to recreate the firm's cash flow statement for the year just ended. the firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. it earned $5 million in net income during the year but paid $800,000 in dividends to common shareholders. throughout the year, the firm purchased $5.5 million of machinery that was needed for a new project. you have just spoken to the firm's accountants and learned that annual depreciation expense for the year is $450,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. what was the firm's end- of-year cash balance? recreate the firm's cash flow statement to arrive at your answer

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Why should managers invest any excess cash