ANSWERS TO QUESTIONS

2) Additional contractual obligations of $4,839 in years 1–3 and $1,610 in years 3–5 are relevant to assessing whether Deere can repay a loan maturing in 5 years. In evaluating a longer term loan, an analyst would need to develop a prediction of Deere’s cash flows over the next 5 years that would be used to repay a longer term loan. ................
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