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Homework answers / question archive / One method of decreasing the cash outflows of a firm is to: A) decrease depreciation B) increase capital expenditures C) decrease dividends D) increase debt repayment

One method of decreasing the cash outflows of a firm is to: A) decrease depreciation B) increase capital expenditures C) decrease dividends D) increase debt repayment

Finance

One method of decreasing the cash outflows of a firm is to:

A) decrease depreciation

B) increase capital expenditures

C) decrease dividends

D) increase debt repayment

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The correct answer to the given question is option C) decrease dividends.

The cash outflows of a firm can be reduced by using following measures:

1) Decreasing the dividends to be paid to the shareholders

2) Decreasing capital expenditures

3) Decreasing debt repayment

The depreciation expense is a non-cash item and therefore it does not affect the cash flows.

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