4. Based on the information in Exhibit 1 for Star Inc., what are the total net adjustments that the company would make to net income to derive operating cash flow?

Exhibit 1: Star Inc.

Year Ended Income Statement Item 12/31/2018 Net income USD20 million Depreciation USD2 million Balance Sheet Item 12/31/2017 12/31/2018 Change Accounts receivable USD25 million USD22 million (USD3 million)

Inventory USD10 million USD14 million USD4 million Accounts payable USD8 million USD13 million USD5 million A. Add USD2 million B. Add USD6 million C. Subtract USD6 million.