When Juan's Taco Hut decided to open several new locations, it spent millions of dollars on property and equipment. Which category of cash flow does this best describe?
A) cash from profiteering activities
B) cash from investing activities
C) cash from financing activities
D) cash from operating activities
E) cash from marketing activities

Question

Quizplus · Accepted Answer

This scenario describes cash from investing activities, which is calculated from changes in the long-term or fixed asset accounts. Juan's Taco Hut's amount would be negative because it just spent millions of dollars on property and equipment to open several new locations.

When Juan's Taco Hut Decided to Open Several New Locations