An assisted living facility in your town is currently at capacity. The company that operates it decides to expand and build an additional wing on to the building that will house 20 more residents. Which of the following does this represent for the company?
A) positive cash flow
B) seasonality
C) negative cash flow cycle
D) long-term investment

Question

Quizplus · Accepted Answer

Building an additional wing to house 20 more residents is a long-term investment for the company. It requires a significant amount of capital to build, and the company is expecting to receive returns on this investment in the form of increased revenue from housing 20 more residents. This is not an example of positive or negative cash flow cycle or seasonality, as it is a strategic decision to expand the business in the long term.

An Assisted Living Facility in Your Town Is Currently at Capacity