Question: [Cash flow from operations; free cash flows] Hertz is the world's largest provider of rental cars and trucks. Extracts from its statement of cash flows follow: Note that Flay includes the purchase; and sales of revenue equipment (cars and trucks to be rented) in cash flow limn operations
a. Recompute cash flow from operations, classifying the pur-chases and sales of revenue equipment as investing cash flows.
b. Compare the trend of cash flow from operations as reported with the trend after reclassification.
c. Recompute cash flow fix investing, classifying the purchases and sales of revenue equipment as investing cash flows.
d. Compare the trend °leash flow for investing as reported with the trend after reclassification.
e. State and justify which classification provides the better mea-sure of cash flow horn op rations for Hertz. Define and compute a useful measure of free cash flow for Hertz. State your assumptions.
f. Assume that Hertz leases (rather than purchases) seine of its rental cars and trucks. Discuss the impact of leasing (rather than buying) on cash flow from operations as reported by Hertz,
g. Discuss the impact of leasing on cash flow from operations, assuming that the purchases of revenue equipment are reponed as cash flows from investing.
