Which of the Following Would Be Considered an Operating Activity

question 83

Multiple Choice

Which of the following would be considered an operating activity on the statement of cash flows?

• A) Dividends paid to stockholders
• B) The sale of inventory
• C) Payment to purchase equipment
• D) The receipt of cash from sale of equipment

Understand the concept of net present value (NPV) and profitability index as methods of investment appraisal.

Learn the methodologies for calculating the discounted payback period.

Understand the concept and calculation of average accounting rate of return (AARR).

Grasp the importance of salvage value in investment appraisal.

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Definitions:

Production Process

The series of actions or steps taken in order to create a product or service.

Goods and Services

The physical items (goods) and intangible assistance or activities (services) that fulfill the needs or wants of consumers, forming the basis of all economic activities.

Comparative Advantage

The capacity of a country or firm to produce a particular good or service at a lower marginal and opportunity cost over another.

Absolute Advantage

The ability of a country or entity to produce a good or service more efficiently (using fewer resources) than another country or entity.