On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method.
Assume that equipment costing $25.000 was purchased for cash and no long term assets were told during the period.
- Stock was issued for cash- 3, 200 shares at par.
- Net income for the current year was $76,000
- Cash dividends declared and paid were $13.000.
Current Year Prior YearCash $170,000 $74,000Accounts receivable (net) 78,000 85,000Inventories 106,500 90,000Equipment 395,000 370,000Accumulated depreciation (195,000) (158,000)Accounts payable (merchandise creditors) $51,000 $50,000Taxes payable|2,500|5,000Common stock, $10 par 262,000 230,000Retained earnings 239,000 176,000$554,500 $461,000

Rate of return douglas keel, a financial analyst for orange industries, wishes to estimate the rate of return for two similar-risk investments, x and y. douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 000, respectively. a. calculate the expected rate of return on investments x and y using the most recent year's data. b. assuming that the two investments are equally risky, which one should douglas recommend? why?