Pizza International, Incorporated, reported the following information (in thousands): Operating Activities Net Income Depreciation Increase in receivables Decrease in inventory Increase in prepaid expenses Decrease in accounts payable Increase in accrued liabilities Decrease in income taxes payable Payments on notes payable Cash paid for equipment $ 100 33,305 170 643 664 8,720 719 2,721 12,691 29,073 The following is the summarized income statement for Pizza International, Incorporated (in thousands): Revenues Cost of Sales Gross Profit Salary and Wages Expense Depreciation Office Expense Net Income before Income Tax Expense Income Tax Expense Net Income Required: $ 143,551 45,500 98,051 56,835 33,305 7,781 130 30 $ 100 1. Based on this information, compute cash flow from operating activities using the direct method. Assume Prepaid Expenses and Accrued Liabilities relate to office expenses. 2. What was the primary reason that Pizza International was able to report large positive cash flow from operations despite nearly having a net loss?