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Problem 2 (18%) Acme Corporation reported losses starting in 2013 and went out of business in early 2017. On its 2016 (the last one!) SCF,

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Problem 2 (18%) Acme Corporation reported losses starting in 2013 and went out of business in early 2017. On its 2016 (the last one!) SCF, the operating-activity section was as follows, in $millions: Net loss $(18.1) Add: Depreciation expense 23.2 Decrease in inventory 8.2 Increase in accounts payable 13.2 Net effect of other operating items 15.0 Cash provided by operations $ 415 A. The inventory decreased, so why is it NOT placed in parentheses? B. Acme disclosed in the financing-activities section of its SCF it paid off $13.0 million of long-term debt in 2016. Examine the above operating-activity data and indicate what Acme most likely did in order to free up cash to pay off its long-term debt. 2

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