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Which one of the following is a source of cash?
repurchase of common stock
acquisition of debt
purchase of inventory
payment to a supplier
granting credit to a customer

Ask by Long Barnett. in the United States
Mar 24,2025

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Acquiring debt is a source of cash.

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Acquisition of debt is a source of cash, as it involves borrowing money, which increases the available cash for a company to use for various purposes like investing or paying liabilities. Essentially, when a company takes on debt, it gets cash in hand, adding to its resources!
In contrast, activities like repurchasing stock or purchasing inventory typically use cash, making them cash outflows. Understanding the cash flow implications of financial decisions is essential for maintaining a healthy balance sheet and ensuring the company can fund its operations and growth.

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