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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Why should companies attempt to secure cash for investment in property, plant, and equipment from long-term or permanent sources?

To determine

Introduction:

Cash flow from investing activities calculates the inflow and outflow of cash from purchase and sale of fixed asset. Fixed assets are such as land and building, machinery, equipments, etc.

To describe:

The reason a company should try to secure cash for fixed from long-term or permanent sources.

Explanation

The company should try to secure cash from long-term financial sources for acquiring fixed assets because investing activities which includes investments in fixed asset such as property, plant, and equipment require several years before the investment is completely recovered in a profitable manner...

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