An Example of an Investing Activity Is

question 72

Multiple Choice

An example of an investing activity is:

• A)Paying wages of employees.
• B)Paying dividends.
• C)Purchasing land.
• D)Selling inventory.
• E)Contribution from owner.

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Definitions:

Liquidity

A company’s ability to convert assets into cash.

Straight-Line Depreciation

A method of calculating the depreciation of an asset which spreads the cost evenly over its estimated useful life.

Useful Life

An estimate of the duration over which an asset is expected to be economically viable and operational in a business.

Average Rate of Return

A financial ratio showing the average annual return of an investment over its lifetime, calculated as the total expected return divided by the initial cost of the investment.