Final answer:
Company A is the most attractive for bond investment with a high operating cash inflow of $50,000, demonstrating its ability to generate cash from its core business operations. Thus (option A) is right answer.
Step-by-step explanation:
You are an investor looking to buy bonds, and all companies are offering 3% bonds. Based on their statement of cash flows, the most attractive investment would likely be the company with the most stable and positive operating cash flows. Here are the options:
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- Company A - Operating inflows of $50,000, Investing outflows of $40,000, Financing outflows of $1,000
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- Company B - Operating outflows of $20,000, Investing inflows of $40,000, Financing outflows of $20,000
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- Company C - Operating outflows of $10,000, Investing outflows of $10,000, Financing inflows of $30,000
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- Company D - Operating inflows of $35,000, Investing outflows of $20,000, Financing inflows of $8,000
Considering the information above, Company A seems the most attractive as it has the highest operating cash inflows with modest investing and financing outflows. This suggests that the company's core business operations are strong, which is a critical aspect for bond investors who are interested in a company's ability to generate cash to pay bond interest and principal.
Thus (option A) is right answer.