Question

XYZ Corporation purchased plant and equipment of $200,000; issued bonds in the amount of $200,000; paid a cash dividend of $50,000, and sold the stock invested in ABC Corporation for $100,000. What is the firm's cash flows from investing activities?

Answer 1

Based on the transactions that the company engaged in, their cash flow from investing activities is -$100,000.

What falls under cashflow from Investing Activities?

Investing activities refers to any capital expenditure such as those related to fixed assets and the securities belonging to other companies.

XYZ Cashflow from Investing Activities

= Sale of stock (cash inflow) - Purchase of equipment (cash outflow)

= 100,000 - 200,000

= -$100,000

In conclusion, the cashflow from investment is -$100,000.

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