Question

Select the correct text in the passage

Which sentences identify the investing activities of a cash flow statement?
Tyler Enterprises has achieved remarkable growth in the past five years. Qualified acęountants have prepared and analyzed the cash flow staterment to offer financial ad
to help safeguard the future of the business. It includes details of the amount of cash flowing into and out of the business. The staternent begins with the amount of
revenue that the sales team has brought in. It also involves the corresponding marketing campaign costs incurred in the promotional exhibition. The profit was declared
the shareholders in the form of dividends. The production team undertook projects that involved installation of autormatic bottling machines. New dishwashers were
installed in the cafeteria as part of an efficiency improvement project. The stakes of an old division of packing material were sold off in order to concentrate solely on
present business. Old investors were issued stocks when their convertible bonds attained maturity. Some of the old machineries in the production line were sold off as
scrap while rest was revamped.

Answer 1

Investing activities in a cash flow statement are reflected in transactions such as the purchase of new machinery and the sale of assets, indicating reinvestment in the business for future profit.

Step-by-step explanation:

The sentences in the passage that identify the investing activities of a cash flow statement include activities such as the purchase of new equipment and the sale of assets. These transactions are related to the long-term growth and capital improvements of the company, essential for reinvesting in the business. They reflect the company's outflow and inflow of cash used for and generated from investments respectively. Specifically, these sentences are: "The production team undertook projects that involved installation of automatic bottling machines." and "The stakes of an old division of packing material were sold off in order to concentrate solely on present business." and "Some of the old machineries in the production line were sold off as scrap while the rest was revamped."

Investing activities reflect how the company is directing its profits towards future growth through the acquisition of new assets or upgrading existing ones. They can involve the sale of long-term assets, which can lead to potential profit generation in upcoming years.