A negative cash flow from investingactivities: (A.) indicates the company is sel

Question

A negative cash flow from investingactivities:

(A.) indicates the company is selling its assets fro more than itcost to purchase them which is a good sign for cash flows
(B.) indicates the company is paying more more to owners andcreditors than it is receiving from them
(C.) indicates the company is re-investing in itself in order togrow and expand
(D.) indicates the company had a net loss using the cash basis ofaccounting
(E.) indicates the company is selling off its long term assetswhich is not a good sign for financial health

Explanation / Answer

Answer C. indicates the company is re-investing in itself in orderto grow and expand. Explanation When a company buys assets (or re-invests) cash flows out and showsa negative cash flow from investing activities.

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