Question: In the example on slide 13 (also shown below), what is the cash effect of change in inventory on operating cash flows in Year 2?

In the example on slide 13 (also shown below), what is

In the example on slide 13 (also shown below), what is the cash effect of change in inventory on operating cash flows in Year 2? Imagine Canyon Buff Corp. spends $100 in year one to make widgets (assume the widgets are shown up as inventory on the balance sheet). The widgets are sold on credit for $125 in year two. The receivable is collected in year three Year 1 2 Inventory $100 $0 $0 Alnventory $100 -$100 $0 AR $0 $125 $0 AAR $0 $125 -$125 A $123 B. 5125 C $100 D. $100

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