Resource: Ch. 2 of Foundations of Financial Management1) Identify whether each of the following increases or decreases cash flow:Increase in accounts receivable Decrease in prepaid expensesIncrease in notes payable Increase in inventoryDepreciation expense Dividend paymentIncrease in investments Increase in accrued expensesDecrease in accounts payable2)The
Rogers Corporation has a gross profit of $880000 and $360000 in
depreciation expense. The Evans Corporation also has $880000 in gross
profit with $60000 in depreciation expense. Selling and administrative
expense is $120000 for each company . Given that the tax rate is 40
percent compute the cash flow for both companies.Explain the difference in cash flow between the two firms.3) Create a statement of cash flows for Crosby Corporation: