REQUIRED Use the cash statement below to answer the following questions: 4.1 Why was depreciation included in computing the cash flow from operating activities? (2 marks) 4.2 Calculate the following 4.2.1 net increase/decrease in payables (2 marks) 4.2.2 net increase/decrease in cash for the year (2 marks) 4.2.3 cash balance on 1 July 2018 (2 marks) 4.3 Based on the cash flow information provided below, how does the company appear to be performing? Refer to at least 5 items on the statement in your evaluation of performance. (5 marks) 4.4 The long term loan was increased during the financial year. Explain if it was prudent for the company to increase its long term liabilities. (3 marks) 4.5 Comment on the dividend policy of the company. (2 marks) 4.6 Suggest two ways in which the company can improve its liquidity. (2 marks) INFORMATION Eindorf Limited Cash flow statement for the year ended 31 June 2019 R (255 000) (280 000) Cash flow from operating activities Operating loss Adjustments Depreciation Profit before working capital changes Working capital changes Increase in inventory Increase in receivables Increase/decrease in payables Dividends paid Interest paid 100 000 (180 000) 55 000 (200 000) (175000) ? (60 000) (70 000) Cash flow from investing activities Acquisition of plant and equipment (300 000 (300 000) Cash flow from financing activities Increase in long term loan (25%) Net decreaseincrease in cash Cash balance (1 July 2018) Cash balance (30 June 2019) 450 000 450 000 ? (160 000)