Which of the Following Is an Example of an Operating

question 3

Multiple Choice

Which of the following is an example of an operating activity?

• A)Paying dividends
• B)Sale of investment in other companies' shares
• C)Purchase of property, plant, and equipment
• D)Payment of interest expense

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Definitions:

Investment

Allocating resources, usually money, with the expectation of generating an income or profit.

Cash Flows

The total amount of money being transferred in and out of a business, particularly in relation to liquidity.

Payback Period

The amount of time it takes to recover the cost of an investment through its cash inflows.

Payback

The method of calculating the duration required to recover the cost of an investment, emphasizing the time it takes to reach a breakeven point.