If a firm's statement of cash flows shows that cash was used for investments,which of the following would seem most likely?
A) The inventory balance increased.
B) Common stock was repurchased.
C) New machines were acquired.
D) Cash dividends were paid.

Question

Quizplus · Accepted Answer

Cash used for investments typically refers to capital expenditures, such as the purchase of new equipment or machinery. Therefore, option C, "new machines were acquired," would be the most likely scenario. Options A and D are unlikely, as an increase in inventory would typically result in a decrease in cash and paying cash dividends would be categorized under financing activities, not investments. Option B, common stock repurchase, would be categorized as a financing activity, not an investment activity.

If a Firm's Statement of Cash Flows Shows That Cash