Using the following information,calculate the cash flow from investing activities:
Disposal of fixed assets for £9,000,with a gain of £1,000; purchase of machine for £11,000; pay-off mortgage £3,000; dividends paid £20,000
A) £4,000 net cash outflow from investing activities
B) 24,000 net cash outflow from investing activities
C) 5,000 net cash inflow from investing activities
D) 5,000 net cash outflow from investing activities

Question

Quizplus · Accepted Answer

- Disposal of fixed assets for £9,000,with a gain of £1,000 is a cash inflow, but it belongs to the operating activities section, not investing activities.
- Purchase of machine for £11,000 is a cash outflow from investing activities.
- Pay-off mortgage £3,000 is also a cash outflow from investing activities.
- Dividends paid £20,000 is a cash outflow from financing activities, not investing activities.

Therefore, the total cash outflows from investing activities are £11,000 + £3,000 = £14,000, and there is no cash inflow from investing activities. 
Hence, the net cash outflow from investing activities is £14,000. 
Therefore, the correct answer must be D: 5,000 net cash outflow from investing activities.

Using the Following Information,calculate the Cash Flow from Investing Activities