To Which Type of Activities in the Statement of Cash

question 8

Multiple Choice

To which type of activities in the statement of cash flows does the following definition correspond: 'these cash flows represent the extent to which expenditures have been made for resources intended to generate future income and cash flows'?

• A) Operating activities
• B) Investing activities
• C) Financing activities
• D) Managing activities

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Definitions:

Average Net Income

The mean amount of revenue remaining after all expenses, taxes, and costs have been deducted over a certain period.

Net Present Value

A calculation that estimates the present value of all future cash flows of an investment, minus the initial investment cost.

Straight-Line Depreciation

A technique for distributing the expense of a physical asset evenly across its life span.

Average Accounting Return

A measure of the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.