Problem:
Provo, Inc, had revenues of $10 million, cash operating expenses of $5 million, and depreciation and amortization of $1 million during 2008. The firm purchase $500,000 of equipment during the year while increasing its inventory by $300,000 (with no corresponding increase in current liabilities). The marginal tax rate for Provo is 40 percent.
Required:
Question: What is Provo's cash flow from operations for 2008?
Provo's cash flow from operations