Question

What are external sources of cash?

1) Cash inflows from investing activities.
2) Cash inflows from operating activities.
3) Cash inflows from financing activities.
4) Both (b) and (c).

Answer 1

External sources of cash in a business include cash inflows from operating activities and financing activities, such as borrowing or selling stock.

Step-by-step explanation:

External sources of cash in a business can come from various activities. These include:

1. Cash inflows from operating activities, which are the day-to-day operations of the business. For example, when customers pay for goods or services.
2. Cash inflows from financing activities, which involve raising funds through borrowing or selling stock. This can include borrowing money from banks or issuing bonds.

Therefore, the correct answer is option 4) Both (b) and (c), as cash inflows from operating activities and financing activities are both external sources of cash.