The following data were included in a recent annual report of YUM, a wholesaler of grocery products. Amounts are in thousands.

Required:
(a) Why is a company€™s net income typically less than its net cash flow from operating activities?
(b) Why do most companies, including YUM, typically have negative cash flows from investing activities?
(c) Over the three-year period, what type of activities was the largest source of funds for YUM? Do business executives want these activities to be their firm€™s principal source of funds? Explain.

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Year Year 2 Year 3 Net income Net cash flow from S 3,716 S 3,818 $8,639 operating activities investing activities financing activities 7,46 2,556 15,390 (41,527) 15,113 17,49 14,983 Net cash flow from(7,792) (32,851) Net cash flow from