2-6B. (Measuring cash flows) Calculate the free cash flows for RPI, Inc., for the year ended December 31, 2003, both from an asset and a financing perspective. Interpret your results.

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RPI, Inc., Balance Sheets for 12/31/02 and 12/31/03 ASSETS 2002 Cash $ 16,000 Marketable securities 7,000 2003 $ 17,000 7,200 Accounts receivable 42,000 38,000 Inventory 50,000 93,000 Prepaid rent 1,200 1,100 Total current assets $116,200 $156,300 Net plant and equipment. 286,000 290,000 Total assets $402,200 $446,300