4.Question 4Which of the following activities would have an effect on the cash flow from financing?1 pointPurchase €20,000 of marketable securities.Payment of €100,000 in dividends. Payment of €40,000 for last year’s taxes.Purchase of 10,000 shares of a listed company.
Question
4.Question 4Which of the following activities would have an effect on the cash flow from financing?1 pointPurchase €20,000 of marketable securities.Payment of €100,000 in dividends. Payment of €40,000 for last year’s taxes.Purchase of 10,000 shares of a listed company.
Solution
The activity that would have an effect on the cash flow from financing is the payment of €100,000 in dividends.
Here's why:
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Purchase €20,000 of marketable securities: This is an investing activity, not a financing activity. It involves the purchase of an investment, which is not a financing activity.
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Payment of €100,000 in dividends: This is a financing activity. When a company pays dividends, it is using its cash to pay back its investors, which is a financing activity.
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Payment of €40,000 for last year’s taxes: This is an operating activity, not a financing activity. Taxes are typically considered part of the day-to-day operations of a business.
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Purchase of 10,000 shares of a listed company: This is an investing activity, not a financing activity. It involves the purchase of an investment, which is not a financing activity.
So, the correct answer is the payment of €100,000 in dividends.
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