Question: While you are studying with a friend, she states: An increase in inventory or the payment of dividends has a negative effect on cash flows

While you are studying with a friend, she states:
“An increase in inventory or the payment of dividends has a negative effect on cash flows from operations, while an increase in accounts receivable or wages payable has a positive effect.”

Required
Evaluate your friend’s statement. Identify the elements that are correct and incorrect. For any elements that are incorrect, explain why.

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