Which of the Following Is a Cash Outflow for a Financing

question 73

Multiple Choice

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

• A) purchase of long-term investments, such as the stock of another company
• B) loans made to another party
• C) purchase of treasury stock
• D) purchase of land

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Definitions:

Preset Level

A predetermined or established level or standard that needs to be achieved or which serves as a benchmark for performance or operation.

Implicit Favorite

An unspoken preference or bias towards a particular option or choice in decision-making processes.

Escalation of Commitment

A psychological process whereby an individual continues to support a failing course of action due to cognitive biases, loss aversion, and sunk costs.

Decision-making Skills

The ability to evaluate information, consider alternatives, and choose the most appropriate course of action.