An investor interested in ensuring that the company is maintaining their productive capacity would look for which of the following cash flows?

Question

Quizplus · Accepted Answer

Cash outflows for investing activities would show if the company is investing in maintaining or expanding their productive capacity, such as investing in new equipment or technology. Cash outflows for operations and financing activities would not necessarily indicate if the company is maintaining productive capacity, and free cash flow is a measure of the cash available after all expenses and investments have been made, but does not necessarily show how that cash is being invested.

An Investor Interested in Ensuring That the Company Is Maintaining