Shield Company Just Started in Business,and It Was Looking for Additional

question 81

Multiple Choice

Shield Company just started in business,and it was looking for additional capital in order to purchase a property to build their headquarters.They found an investor who was willing to sell them land worth $700,000 in exchange for stock in the company.On the statement of cash flows,this transaction would be shown in the ________.

• A)investing activities section
• B)non-cash investing and financing activities section
• C)operating activities section
• D)financing activities section

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Definitions:

Multiple IRR Projects

Investment projects that, due to their cash flow structure, yield more than one internal rate of return, complicating the investment decision.

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity, by calculating the present value of expected future cash flows.

Discounted Payback

A capital budgeting method that calculates the amount of time needed to recoup an investment based on its discounted cash flows.

Profitability Index

A calculation used to assess the desirability of an investment, defined as present value of future cash flows divided by initial investment.