All of the following are eventual cash outflows to the firm EXCEPT
A) the purchase of shares of stock in the firm by an investor.
B) the declaration of dividends by the board of directors.
C) the purchase of goods for resale.
D) all of the above require eventual cash outflows to the firm.

Question

Quizplus · Accepted Answer

The purchase of shares of stock by an investor does not result in a cash outflow to the firm, as the funds are paid to the seller of the shares (the previous owner) rather than to the firm itself. The other options listed (declaration of dividends and purchase of goods for resale) both involve the firm making payments or expenditures that require cash outflows.

All of the Following Are Eventual Cash Outflows to the Firm