A company in the growth phase of its product life cycle will normally have the following pattern of cash flows
A) Negative cash flows from operations, negative cash flows from investing and positive cash flows from financing.
B) Negative or positive cash flows from operations, negative cash flows from investing and positive cash flows from financing.
C) Positive cash flows from operations, positive cash flows from investing and positive cash flows from financing.
D) Negative or positive cash flows from operations, negative cash flows from investing and negative cash flows from financing.

Question

Quizplus · Accepted Answer

A company in the growth phase of its product life cycle may have negative or positive cash flows from operations, depending on the level of sales growth and resulting expenses. It is likely to have negative cash flows from investing, as it invests heavily in capital expenditures to support growth. Positive cash flows from financing may be needed to raise capital to fund these investments.

A Company in the Growth Phase of Its Product Life