Answer to Question #211208 in Finance for N M Rao

Question

Company purchased land for Rs 37,50,000. Company also sold 9,50,000/-. What the investment capacity of company as per cash flow statement.

Answer 1

The cash flow statement is the statement that shows the summary of cash inflows and cash outflows. The cash from investing activities shows the investment funds invested in the nin-current assets of the company. 

Compute the investment capacity of the company, using the equation as shown below:

$Investment\space capacity=Land\space sold-Land \space purchased$

$=Rs950,000-Rs3,750,000\\=Rs2,800,000$

Hence, the investment capacity of the company is –$2,800,000.

The investment capacity of the company is –$2,800,000.