3. Calculate the cash flow from operating activities of Karp Inc. for 2009

4. Calculate the cash conversion cycle of Karp Inc. for 2009 both in LIFO base and FIFO base.

65 10 1 Karp Inc. Textbook page 414 2 Balance Sheet information (US$ millions) 3 As of December 31 2009 2008 4 Cash and cash equivalent 172 157 5 Accounts receivable 626 458 6 Inventories 620 539 7 Other current assets 125 8 Total current assets 1,543 1,219 9 Property and equipment, net 3,035 2,972 Total assets 4,578 4,191 11 Total current liabilities 1,495 1,395 12 Long-term debt 644 604 13 Total liabilities 2,139 1,999 14 Common stock and paid in capital 1,652 1,652 15 Retained earnings 787 540 16 Total shareholders' equity 2,439 2,192 17 Total liabilities and shareholders' equity 4,578 4,191 18 19 Income Statement Information (US$ millions) 20 For Years Ended December 31 2009 2008 21 Sales 4,346 4,161 22 Cost of goods sold 2,211 2,147 23 Depreciation expense 139 119 24 Selling, general, and administrative expense 1,656 1,637 25 Interest expense 31 18 26 Income tax expense 62 48 27 Net income 247 192 28 29 Notes 30 The LIFO reserves as of December 31 2009 and 2008 are $155 million and $117 million. 31 The effective tax rate for 2009 and earlier periods is 20%