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Ratios: Capital Acquisition Ratio
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Problem 10
Ratios: Capital Acquisition Ratio
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14. Financial Statement Analysis / Ratios: Capital Acquisition Ratio / Problem 2
Problem 2
What effect does purchasing fixed assets have on a company's cash flow and expansion strategy?
A
It decreases cash flow permanently and limits expansion opportunities.
B
It increases cash flow immediately and reduces the need for future investments.
C
It has no impact on cash flow but affects profitability.
D
It reduces cash flow initially but may lead to increased cash flow through business expansion.
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