Transactions of a Company That Include the Purchase and Sale

question 43

Multiple Choice

Transactions of a company that include the purchase and sale of long-term productive assets are referred to as:

• A)Investing activities.
• B)Financing activities.
• C)Expenditure activities.
• D)Operating activities.

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Definitions:

Required Rate

The minimum annual rate of return that an investor expects to achieve on an investment.

After-tax Cash Inflows

The amount of cash generated from any business activity after accounting for taxes.

Scrap Equipment

Old or discarded machinery and equipment that has no further use and is usually sold for its material content.

Discounted Payback Period

The time period required for the return on an investment to cover the cost, taking the time value of money into account.