Firms receive cash inflows and disburse cash outflows for investing activities such as to
A)pay dividends.
B)build their productive capacity by acquiring property, plant, and equipment.
C)make debt service payments.
D)all of the above.
E)none of the above.

Question

Quizplus · Accepted Answer

Investing activities involve the acquisition or disposal of long-term assets, such as property, plant, and equipment. Therefore, option B is the correct choice as it highlights building productive capacity by acquiring property, plant, and equipment. The other options listed are related to financing activities (dividend payments) and operating activities (debt service payments).

Firms Receive Cash Inflows and Disburse Cash Outflows for Investing