Resource: Palepu et al. text.
Interpret the data provided in the Harnischfeger Corporation case on pp. 20–44 of Ch. 3 in the Palepu, et al. text.
Answer the three questions posed on p. 23 of Ch. 3. Your submission should be between 1,400 to 2,400 words.
QUESTIONS
1. Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company’s 1984 reported profits.
2. What do you think are the motives of Harnischfeger’s management in making the changes in its financial reporting policies? Do you think investors will see through these changes?
3. Assess the company’s future prospects, given your insights from questions 1 and 2 and the information in the case about the company’s turnaround strategy. The rest of the company’s information are on the pages following the three questions.








Jermaine Byrant
Nicole Johnson



