McDonalds Corporation McDonalds is the largest and best-known global food-service retailer, with more than 32,000 restaurants in over 115 countries. On any day, McDonalds serves approximately 1 percent of the worlds population. The following is information related to McDonalds property and equipment. Instructions

Please explain reasoning.

a. What method of depreciation does McDonalds use?

b. Does depreciation and amortization expense cause cash flow from operations to increase? Explain.

c. What does the schedule of cash flow measures indicate?

11 McDonald's Corporation Summary of Significant Accounting Policies Section Property and Equipment. Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: buildings-up to 40 years; leasehold improvements-the lesser of useful lives of assets or lease terms, which generally include option periods; and equipment,three to 12 years. [In the notes to the financial statements:] Property and Equipment Net property and equipment consisted of: December 31 (In millions) 2017 2018 Land $ 5,662.2 $5,465.0 Buildings and improvements on owned land 14,776.9 13,695.2 Buildings and improvements on leased land 12,509.2 11,511.9 Equipment, signs and seating 3,165.7 3,270.9 Other 512.4 500.4 36,626.4 34,443.4 Accumulated depreciation and amortization 14,178.1 13,185.8 Net property and equipment $22,448.3 $21,257.6 Depreciation and amortization expense for property and equipment was (in millions): 2017 -$1,227-5; 2016-$1,390.7; 2015-$1,438.0. [In its 6-year summary, McDonald's provides the following information.] (in millions) 2017 2016 2015 Cash provided by operations Capital expenditures $5,551 1,854 $6,060 1,821 $6,539 1,814