Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements "Decrease in Inventory", indicate the effect on net income in arriving at net cash flow from operating activities by choosing one of the following: 1) Added to net income to arrive at net cash flows from operating activities O2) This would be an investing activity since you must invest in inventory to operate a business. 3) Subtract from net income to arrive at net cash flows from operating activities 4) Not used to adjust net income to calculate net cash flows from operating activities