Adventis Financial Modeling Certification (FMC) Level 1 Practice Test

Cash from investing activities primarily involves transactions that pertain to the acquisition and disposal of long-term assets and investments. This includes purchases of property, plant, and equipment, as well as investments in other businesses and securities. When a company invests in these long-term assets, it represents an outflow of cash, whereas selling or disposing of these assets generates cash inflows.

This classification is essential because it allows stakeholders to assess how much capital a business is investing in its growth and sustainability. By focusing on the activities involved in acquiring or disposing of long-term investments, this answer accurately captures the essence of what constitutes cash from investing activities in financial reporting.

In contrast, other choices refer to operating or financing activities which do not fall under the investing category. Consumer sales and profit contributions relate to operating activities, while dividends and share repurchases are connected to financing activities. Employee wages and benefits involve operational costs, further confirming that these options do not pertain to investing activities.