Table 1 shows the income statement of ABC Company in 2008. In 2009, the following information is known: (a) The revenue, allowance for bad debt, COGS, and SG&A expenses (excluding depreciation) are the same as those of 2008. (b) On 1 January 2009, an existing piece of equipment that had an original cost of $12,000,000 and an accumulated depreciation of $9,000,000 is retired. At the time the original straight-line depreciation schedule was created, it was assumed that there would be no salvage value at the end of the service life of this equipment. This retired equipment is sold for $4,000,000 on the market. (e) On 1 January 2009, a new piece of equipment is bought and installed with a total cost of $24,000,000. Management of the company determines to use the same depreciation period of 8 years for this new piece of equipment that it had used for the old piece of equipment. (d) There is a writedown of $2,500,000 of stale or obsolete inventory in 2009. (e) On 1 January 2009, the company borrows a 10-year loan of $1,000,000, with an annual interest rate Of 10%. Please answer the following questions: 1. What are the cash flow from operations and the net cash flow in 2008? How long was the old piece of equipment in service? 2. Assume that the depreciation for all items other than the new piece of equipment is unchanged. Complete the income statement for 2009. What 3. are the cash flow from operations and the net cash flow on the Income Statement for 20097 4. Just given the data Why? for the two years, was the company sound in buying the new piece of equipment? 5. Income Statement 2008 2009 $18,232,000 Revenue $182,000 Allowance for Bad Debt $18,050,000 Net Revenue $12,179,000 Cost of Goods Sold Contribution Margin Contribution Margin, % $$,871,000 32.53% Sales, General, and Administrative Expense $2,796,000 All Items except Depreciation Depreciation$2,430,000 $645,000 Operating Income $400,000 Other Income $1,045,000 Net Income Operating Cash Flow Net Cash Flow