If a Company Has Both an Inflow and an Outflow

question 132

Multiple Choice

If a company has both an inflow and an outflow of cash related to property, plant, and equipment,

• A) the two cash effects can be netted and presented as one item in the investing activities section of the statement of cash flows.
• B) the cash inflow and the cash outflow should be reported separately in the investing activities section of the statement of cash flows.
• C) the two cash effects can be netted and presented as one item in the financing activities section of the statement of cash flows.
• D) the cash inflow and the cash outflow should be reported in the financing activities section of the statement of cash flows.

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Definitions:

Preventive Maintenance

Scheduled maintenance activities designed to prevent equipment failures before they occur, aimed at reducing downtime and increasing reliability.

Breakdown Maintenance

involves repairs or adjustments made after equipment has failed, aiming to restore it to operational condition.

MTBF

"Mean Time Between Failures," a reliability measure for products indicating the average time between operational failures.