Question

Cash flow from investing activities excludes:

a. Cash paid for acquisitions.

b. Cash received from the sale of fixed assets.

c. Inventory increases due to a new (internally developed) product line.

d. All of the above

Short answer

Option c.

Step-by-step solution

Definition of cash flow

The cash flow refers to the movement of money, especially from one bank account to the other during the accounting year.

Explanation

Cash flow from investing activities includes the sale and purchase of capital assets or investments during the accounting year. Change in inventory due to a new product line is part of cash flow from operating activities, not the investing activities. Therefore Option (c) is the correct answer.

The amount paid for any acquisitions and any amount from the sale of the assets are also considered investing activities. So these are incorrect options.