Which of the Following Is Considered a Financing Activity and a Source

question 18

Multiple Choice

Which of the following is considered a financing activity and a source of cash on the statement of cash flows?

• A)Purchase of treasury stock
• B)Sale of land
• C)Borrowing on a long-term basis
• D)Payment from customers

Know the differences between net present value and average rate of return methods of capital investment analysis.

Recognize the purpose and method of calculating average rate of return.

Comprehend the concept of net cash inflows and their importance in capital budgeting decisions.

Grasp the concept of amortization period in investment decisions.

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Definitions:

Depreciable Non-Current Asset

A long-term asset subject to depreciation, reflecting its usage, wear and tear, or obsolescence over time, leading to a reduction in its book value.

NCI Share

NCI Share, or Non-Controlling Interest Share, represents the equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Useful Life

The estimated period over which a fixed asset is expected to be usable by an organization, affecting depreciation calculation.

Tax Rate

The tax rate is the percentage at which an individual or corporation is taxed, determining how much tax needs to be paid on various income levels or economic activities.