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Into which three groups are a firm's cash flows divided?
ACurrent, fixed and intangible activities
BSelling, general and administrative activities
CDomestic, foreign and joint venture activities
DOperating, investment and financing activities
Answer & Solution
Correct answer: D. Operating, investment and financing activities
1. Using income statement and balance sheet data, cash flows are split three ways.
2. Operating activities are those related to the production of the firm's goods or services.
3. Investment activities are those related to the purchase and sale of fixed assets.
4. Financing activities are those related to debt and equity financing.
5. Current, fixed and intangible are balance sheet asset categories, so that grouping belongs to a different statement altogether.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.6 The Statement of Cash Flows_
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