Question

Investing activities, such as the purchase of new machinery, may be financed by the company's primary operating activities, or by _____ sources?

1) external
2) internal
3) government
4) personal

Answer 1

Investing activities in a business, like purchasing new machinery, can be financed by external sources, which include early-stage investors, reinvesting profits, borrowing from banks or bonds, and selling stock.

Step-by-step explanation:

Investing activities, such as the purchase of new machinery, may be financed by the company's primary operating activities, or by external sources.

Firms often invest money today in order to generate profits in the future, such as purchasing long-lasting machinery or initiating research and development projects.

To finance these investments, companies can utilize different sources of financial capital including:

Each method of raising capital comes with its own set of obligations for the business, including how these financial resources will be repaid or compensated.

Investing activities in a business, like purchasing new machinery, can be financed by external sources, which include early-stage investors, reinvesting profits, borrowing from banks or bonds, and selling stock.