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    Question

    The sale of an old vehicle for ₹2,00,000 (book value

    ₹2,50,000) will be reported in the cash flow statement as:
    A ₹2,50,000 outflow investing activities Correct Answer Incorrect Answer
    B ₹2,00,000 inflow investing activities Correct Answer Incorrect Answer
    C ₹2,50,000 inflow investing activities Correct Answer Incorrect Answer
    D ₹2,00,000 inflow operating activities Correct Answer Incorrect Answer
    E No cash flow effect Correct Answer Incorrect Answer

    Solution

    Cash received on sale of fixed asset is inflow under investing activities, regardless of book value or gain/loss.

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