BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Money Has Time Value
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Risk Return Trade Off
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Cash Flows Are Source Of Values
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Market Prices Reflect Information
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Detailed explanation-1: -Investment is the purchase of capital or productive assets, such as machinery and business premises. The aim of such expenditure is to enable the production of goods or services that will generate future cash flow and profits for the business.
Detailed explanation-2: -Cash flows from investing activities include making and collecting loans (except for program loans) and the acquisition and disposition of debt or equity instruments.
Detailed explanation-3: -That’s because cash is flowing out of the business to cover the purchase. Proceeds from the Sale of Investments: When a company sells off one of its investments for cash, the sale will result in an increase in cash flow from investing activities.
Detailed explanation-4: -Cash flow also affects your company’s ability to grow. Positive cash flow gives you more capital to spend on expenditures like a new machine or a second location for your business expansion plan. The more cash you bring in, the more freedom you have to reinvest.