The ZZZ Corporation issued $25 million in new common stock in 2012.It used $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans.As a result,investment:

Question

Quizplus · Accepted Answer

The $18 million used to replace obsolete equipment in the factory represents an investment, as it is a capital expenditure aimed at improving the company's production capabilities. However, the $7 million used to repay bank loans is not an investment, as it does not add any value to the company's assets or operations. Therefore, only $18 million represents an investment out of the $25 million raised through the issuance of new common stock.

The ZZZ Corporation Issued $25 Million in New Common Stock