The following information was obtained from Melville Company's comparative balance sheets:

Assume that Melville Company's income statement showed depreciation expense of \($10,000,\) a gain on sale of investments of \($7,000,\) and a net income of \($60,000.\)

(a) Calculate the cash flow from operating activities using the indirect method and

(b) compute Melville's operating-cash-flow-to-capital-expenditures ratio.

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Year End of Beginning of Year Cash....... Accounts receivable Inventory... 19,000 $ 9,000 50,000 35,000 55,000 49,000 Prepaid rent 6,000 8,000 Long-term investments. 21,000 32,000 Plant assets. 140,000 106,000 Accumulated depreciation (42,000) (32,000) Accounts payable.. 24,000 22,000 Income tax payable 4,000 6,000 Common stock. 127,000 92,000 Retained earnings Capital expenditures. 106,000 91,000 15,200