McDonald's is the largest and best-known global food service retailer, with more than 32,000 restaurants in 118 countries. On any day, McDonald's serves approximately 1 percent of the world's population. Presented on the next page is information related to McDonald's property and equipment.

McDonald's Corporation

Summary of Significant Accounting Policies Section

Property and Equipment. Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: buildings? up to 40 years; leasehold improvements? lesser of useful lives of assets or lease terms including option periods; and equipment? 3 to 12 years. [In the notes to the financial statements:]

Property and Equipment Net property and equipment consisted of:

Instructions(a) What method of depreciation does McDonald's use?(b) Does depreciation and amortization expense cause cash flow from operations to increase?Explain.(c) What does the schedule of cash flow measuresindicate?

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December 31 (In millions) 2008 2009 $ 5,048.3 $ 4,689.6 Land Buildings and improvements on owned land Buildings and improvements on leased land Equipment, signs and seating Other 12,119.0 10,952.3 10,788.6 4,205.1 11,347.9 4,422.9 502.4 516.8 33,440.5 (11,909.0) $ 21,531.5 31,152.4 Accumulated depreciation and amortization (10,897.9) $ 20,254.5 Net property and equipment Depreciation and amortization expense related to continuing operations was (in milions): 2009–$1,160.8; 2008-$1,161.6; 2007-$1,145.0. [In its 6-year summary, McDonald's provides the following information.] Cash Provided by Operations (dollars in millions) 2009 2008 2007 $5,751 $1,952 $5,917 $2,136 $4,876 $1,947 Cash provided by operations Capital expenditures Cash provided by operations as a percent of capital expenditures 295% 277% 250%