An example of an investing activity is: A) Issuing new corporate stock B) Paying corporate income taxes C) Buying new computers D) Taking out a new loan

Business Dec 25, 2020

An example of an investing activity is:

A) Issuing new corporate stock

B) Paying corporate income taxes

C) Buying new computers

D) Taking out a new loan.

Expert Solution

The correct answer to the given question is option C) Buying new computers

The activity of issuing new corporate stock and the activity of taking a new loan are financing activities as they are meant to raise funds from shareholders and lenders respectively. The activity of paying corporate income taxes is an operating activity as it is concerned with the operations of the firm. The activity of buying new computers is an investing activity as the computers are assets of the firm.

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