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In their early years, start-up companies are most likely to report: A. Positive cash flows from...

In their early years, start-up companies are most likely to report:

A. Positive cash flows from both operating activities and investing activities

B. Negative cash flows from operating activities and positive cash flows from investing activities

C. Positive cash flows from financing activities and negative cash flows from investing activities

D. Negative cash flows from financing activities and positive cash flows from operating activities

E. Negative cash flows from both financing activities and operating activities

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Answer #1

ANSWER:

OPTION C: positive cash flow from financing activities and negative cash flow from investing activities.

REASON:

Start-up companies start their business by acquiring funds therefore it causes positive cash flow from financing activities. And they invest these funds into purchasing capital/long term assets thereby causing cash outflow resulting in negative cash flow from investing activities.

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