One method of decreasing the cash outflows of a firm is to _____.
A) decrease depreciation
B) increase capital expenditures
C) decrease dividends
D) increase debt repayment

Question

Quizplus · Accepted Answer

Decreasing dividends would directly impact the cash outflows of a firm. By reducing the amount paid out to shareholders, the company can retain more cash to reinvest in the business or pay off debt. Decreasing depreciation would only impact the calculation of net income, not directly impact cash outflows. Increasing capital expenditures would actually increase cash outflows in the short term. Increasing debt repayment may decrease future cash outflows by reducing interest expenses, but it does not directly impact current cash outflows.

One Method of Decreasing the Cash Outflows of a Firm