Final answer:
The correct answer is option c. Cash inflows generated by capital investments typically include incremental revenues, cost savings, and a reduction in the amount of required working capital. An increase in operating expenses, which is not a cash inflow but rather an outflow, is the correct answer to the question.
Step-by-step explanation:
The question relates to the cash inflows that are generated by capital investments. Capital investments are used by businesses to grow by reinvesting a portion of their profits into assets like factories, technology, and labor. These investments are aimed at producing additional products, generating incremental revenues, and achieving cost savings among other benefits, ultimately leading to an increased cash flow.
When analyzing the options provided in the multiple-choice question, the cash inflows from capital investments can indeed include incremental revenues from the sale of additional products or services, cost savings from improved efficiency or productivity, and a reduction in the amount of required working capital, which can free up funds for other uses. However, an increase in operating expenses is generally not considered a cash inflow, but rather a cash outflow, since it is an expense that the company has to pay out.
Therefore, the correct option that does not represent a cash inflow generated by capital investments is:
c. increase in operating expenses.