Consider the Following Cash Flow Items: Pay Amount Owed to Bank

question 152

Multiple Choice

Consider the following cash flow items: Pay amount owed to bank for previous borrowing.Pay utility costs.Purchase equipment to be used in operations.Purchase office supplies.Pay one year of rent in advance.Pay workers' salaries.Pay for research and development costs.Pay taxes to the IRS.Sell common stock to investors.How many of these cash flow items involve investing activities?

• A)Zero.
• B)One.
• C)Two.

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Definitions:

Specialists

Professionals on a stock exchange who are responsible for maintaining a fair and orderly market in their specific assigned securities.

Margin Account

An account offered by brokerages that allows investors to borrow money to buy securities, with the securities themselves serving as collateral for the loan.

Margin Loan

A loan provided by brokers to investors that allows them to buy securities by borrowing funds, using the purchased securities as collateral.

Maintenance Requirements

The minimum equity amount that must be maintained in a margin account.