Issuing additional long-term debt of $5 million and buying new long-term assets worth $5 million will result in a net cash flow of:

Name: Issuing additional long-term debt of $5 million and buying new long-term assets worth $5 million will result in a net cash flow of:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Issuing additional long-term debt of $5 million will result in a cash inflow of $5 million, but using that $5 million to buy new long-term assets will result in a cash outflow of $5 million. Therefore, the net cash flow is zero.

Issuing Additional Long-Term Debt of $5 Million and Buying New