Indicate the Section (Operating Activities, Investing Activities, Financing Activities

question 165

Essay

Indicate the section (operating activities, investing activities, financing activities, or none) in which each of the following would be reported on the statement of cash flows prepared by the indirect method.
(a)Gain on sale of fixed assets
(b)Net income
(c)Retirement of long-term debt
(d)Sale of capital stock
(e)Distribution of stock dividends
(f)Payment of cash dividends
(g)Purchase of fixed assets
(h)Sale of fixed assets
(i)Increase in inventory
(j)Payment of interest expense

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Definitions:

Net Present Value

The discrepancy in the present valuation of incoming and outgoing cash flows within a certain timeframe.

Useful Life

The estimated duration of time a fixed asset is considered to be productive for its intended use.

Working Capital

is the difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Discount Rate

The interest rate used to discount future cash flows to their present value, reflecting the opportunity cost of capital.