Cash-Flow Statement Hertz is the world's largest provider of rental cars and trucks. Extracts from its statement of cash flows follow: Cash Flows of Hertz Corp. 1989 1990 1991 Net Income 108 Depreciation of revenue equipment 475 Depreciation of property Self-insurance and other accruals Purchases of revenue equipment (4024) (4016) Sales of revenue equipment 3434 3784 Changes in operating assets and liabilities (net) (141) (118) Payment of self-insurance claims (104) (106) Cash flow from operations (117) 286 57 100 3003) Cash flow from investing (133) (79) 241 Net change in debt Dividends paid Cash flow from financing 151 68 (62) (146) Effect of foreign exchange rates Net increase (decrease) in cash (98) (44) 68 Source: Hertz Corp. 1991 Annual Report Note that Hertz includes purchases and sales of revenue equipment (cars and trucks to be rented) in cash flow from operations. 2.1 Recompute cash flow from operations, classifying purchases and sales of revenue equipment as investing cash flows. 2.2 Compare the trend of cash flow from operations as reported with the trend after reclassification. 2.3 Recompute cash flow for investing, classifying purchases and sales of revenue equipment as investing cash flows. 2.4 Compare the trend of cash flow for investing as reported with the trend after reclassification 2.5 Assume that Hertz leases (rather than purchases) some of its rental cars and trucks. Discuss the impact of leasing (rather than buying) on cash flow from operations as reported by Hertz