All else equal, if a firm invests an additional $100,000 in inventory during the year,

Name: All else equal, if a firm invests an additional $100,000 in inventory during the year,
Brand: Quizplus
Rating: 4.8 (52 reviews)

Question

Quizplus · Accepted Answer

Investing in inventory is considered an operating activity because inventory is part of the day-to-day operations of a business. Therefore, if a firm invests an additional $100,000 in inventory, it means the firm is using its cash for operating purposes, leading to a decrease in cash flow from operating activities.

All Else Equal, If a Firm Invests an Additional $100,000