Which is about cash flow?

Question

Which of the following activities is most likely to have a cash flow effect

investing in money market

declaring cash dividends

reissuing treasury stock

issuing stock to acquire a patent

Answer 1

I believe it is the 4th choice "issuing stock to acquire a patent"

Answer 2

When you say cash flow, there are two kinds: in flow and out flow.  In flow is the income coming in and out flow is the amount invested.

When you invest in money market, you had a cash out flow for the amount of money that you placed in it.  When you received dividends from investments in stocks or bonds, that is your cash inflow. Treasury stock is the stock owned by the company itself.  Reissuing it does not involve any cash.  When you issue stock to acquire a patent, you did not disburse cash also but instead you gave out stock to pay for your patents.  So I think the correct answers are the first two.

Learn more about investing and entrepreneurship in these sites:

http://www.investmentpaysoff.com

http://www.entrepreneurwiz.com

Answer 3

All of them, because in each case cash is actually changing hands.  Assuming that the stock is issued for cash and then the patent is acquired with cash, and not a direct exchange of stock for the patent.

Answer 4

Declaring cash dividends.  In that solution cash is going to go out of your company.

In the other answers:

Investing in money markets - It doesn't tell you want you are investing in the money market, it could be cash but it could be anything else too.

Reissuing stock could get you some cash but it could get you other things as well.

Issuing stock to acquire a patent - this is NOT a cashflow for sure.  No cash is exchanged so no cashflows can be recorded.