Intel disclosed the following selected amounts (in millions) in its 1997 annual report:

IO MIRGNGTMIG a ctreernncrcccartmasen Gg tiaaiManieniiessant Kore toreeniacee ce ns neice $25,070 SERS AGS eee Tamme gr crete tsar rea eee eee nsecett 9,945 Brea aU ANN GO MRIO DIET uta sat asses acct ei seed earch 2,347 Marketing; general and) administratives:..cisalictslssscsssssscssscschotsvesesescsssscscecsededtossvseeconsoane 2,89 | MCE SCIEN DUNS CR email eects ets SA EEE) a eT yal (Ok 27 BBCSO GI NV CONING be ctesre andes ees ce Sosresstcae adeeb event ed aac Pctwlencnictnoc 799 LES CCS et Peat Ee Ce 3,714 PDC ASE HY AECOUNIES. FECCIVAEN Ses ccencccccnsovenesnavscccgnsavsononnesenesacndenccesandaesdapiobossécssctan $ 285 Increase in inventories............00 404 Decrease in other assets (Net)....c.ccsssscssssessssssesesssseeesreeee a 97 Increase in accounts payable.......ccccssssscsssssssssseesssseeees ate 438 Increase in accrued compensation and benefits Cee caret ance cereeennetommerst reeseieen tere 140 Increase in income taxes PAV aI ries cscncecswaaenercrereosticenekvexientssezsntansoacesaiessbechternvesngy 179 PD EDIE CIALION nantrresarens tore erie ster ecas cn ceere Grn cc ae tan te gee a . 2,192 Net loss on retirements of property, plant, and EqQUuIPMENt .........sssssssssssssssssssseeseeeeeeee 130 increasenm deferred income: tax liabilitys:.....ste een renee: 6 Required: (1) Explain the advantages of

(a) the indirect method and

(b) the direct method of reporting the cash flows from operating activities. Explain which method you prefer.
(2) Calculate Intel’s net cash provided by operating activities for 1997 under the direct method, computing a single amount for all the operating payments other than those for interest and for income taxes.
(3) Calculate Intel’s net cash provided by operating activities for 1997 under the indirect method.
(4) Calculate Intel’s operating cash flow margin (discussed in Chapter 8) for 1997. In 1996, Intel’s operating cash flow margin was 41.9% ($8,743 +
$20,847). Explain how the company’s performance has changed.