Based on the following information for Pinkerly Inc., what are the total net adjustments that the company would make to net income in order to derive operating cash flow?
|
Year Ended |
|||
|
Income Statement item |
120/31/2006 |
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|
Net income |
$20 million |
||
|
Depreciation |
$2 million |
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|
Balance Sheet Item |
12/31/2005 |
12/31/2006 |
Change |
|
Accounts receivable |
$25 million |
$22 million |
($3 million) |
|
Inventory |
$10 million |
$14 million |
$4 million |
|
Accounts payable |
$8 million |
$13 million |
$5 million |
a. Add $6 million
b. Add $8 million
c. Subtract $6 million