Final answer:
The cash outflow in the investing activities section of the statement of cash flows is the purchase of equipment, option C is correct.
Step-by-step explanation:
The cash outflow in the investing activities section of the statement of cash flows is the purchase of equipment, option C. This is considered a cash outflow because it involves spending money to acquire new equipment for the company's operations.
Dividends paid to the company's own stockholders, option A, would be considered a cash outflow in the financing activities section of the statement of cash flows. Retirement of bonds payable, option B, would also be considered a cash outflow in the financing activities section.
Payment of interest to a lender, option D, would be considered a cash outflow in the operating activities section of the statement of cash flows.
The question asks which of the listed items would be considered a cash outflow in the investing activities section of the statement of cash flows. The correct answer to this question is C) Purchase of equipment. This is because when a company purchases equipment, it is an investment in long-term assets, and this outflow of cash is reported in the investing activities section of the cash flows statement.
On the other hand, dividends paid to stockholders (A), retirement of bonds payable (B), and payment of interest to a lender (D) are all classified differently in the statement of cash flows. Dividends are usually reported in the financing activities, retirement of bonds is often a financing activity as well, and interest payments can be considered an operating activity.