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Conrad Company has been in operation for four years. The company is pleased with the continued improvement in net income but is concerned about a
Conrad Company has been in operation for four years. The company is pleased with the continued improvement in net income but is concerned about a lack of cash available to replace existing equipment. Land, buildings, and equipment were purchased at the beginning of Year 1. No subsequent fixed asset purchases have been made, but the president believes that equipment will need to be replaced in the near future. The following information is available. (All amounts are in millions of dollars.) Year of Operation Year 1 Year 2 Year 3 Year 4 $(10) $(2) $15 $20 30 25 15 14 Net income (loss) Depreciation expense Increase (decrease) in: Accounts receivable Inventories Prepayments Accounts payable 32 26 0 15 5 8 0 3 12 20 5 9 105 (5) (4) vod Required: 1. Compute the cash flow from operations for each of Conrad's first four years of operation. Enter amounts in millions. Use the minus sign to indicate a negative cash flow. Year 1 Year 2 Year 3 Amount million million $ $ million Year 4 $ million
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