Statement of Income Revenue $ 3,000,000 Cost of sales (2,000,000) Gross profit 1,000,000 Operating expenses (650,000) Profit before taxes 350,000 Income tax expense (150,000) Profit for the year $ 200,000 Statement of Financial Position Non-current assets $ 1,200,000 Equity $ 800,000 Inventories 400,000 Long-term borrowings 800,000 Trade receivable 380,000 Trade and other payables 100,000 Cash $ 20,000 Short-term borrowings $ 300,000 Short-term borrowings interest rate Long-term borrowings interest rate 8 % (before tax) 6% (before tax) 14. The company's after tax cost of financing is 15. If the statement of income would show a depreciation/amortization amount of $20,000, what would be the cash generated by the company? The cash flow would be 16. If the company's accounts receivable is lowered to $300,000, how much cash will it generate? The additional cash would be 17. If the company improves its inventory turnover to $350,000, how much cash will it generate? The additional cash would be 18. If the company's return on revenue is improved to 8.0%, how much profit for the year would be generated? The additional net income would be 19. By using the information contained in exercises 15, 16, 17, and 18, how much cash would the company generate? The additional cash would be 20. By using the information contained in exercise 18, what is the company's new return on assets? The new return on assets is