Question

Write examples of cash inflows and outflows from Investing activities.

Hint:

Investing activities always relate to long-term assets, not day-to-day working capital items.

Answer 1

Investing activities relate to the purchase and sale of long-term assets. Cash inflows from investing activities include:
1. Cash received from sale of land, building or machinery.
2. Cash received from sale of investments (such as shares or debentures).
Cash outflows from investing activities include:
1. Cash paid for purchase of fixed assets such as plant, equipment or furniture.
2. Cash paid for purchasing long-term investments.