Which One of These Is a Cash Outflow from a Corporation

question 12

Multiple Choice

Which one of these is a cash outflow from a corporation?

• A) sale of an asset
• B) dividend payment
• C) sale of common stock
• D) issuance of debt
• E) profit retained by the firm

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Definitions:

Invested

The act of allocating resources, usually money, into something to earn a return or achieve a financial goal.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal loan amount that has to be paid to the lender over a specific period.

Compounded Annually

A method where the interest earned is added to the principal sum at the end of each year, resulting in interest being earned on interest in subsequent years.

Compounded Annually

Refers to the process where interest earned on an investment is added to the principal, and the new total becomes the basis for computing interest in the next period.