Calculate cash flow from investing activities from the following information.
1. During the period, the enterprise acquired Fixed Assets for Rs. 350. The payment was made in cash.
2. Plant (part of fixed asset) with an original cost of Rs. 80 having accumulated depreciation of Rs. 60 was sold for Rs. 20.
3. Interest Income received Rs. 300.
4. Dividend Income received Rs. 200.
5. Interest on long term bank loan paid Rs. 1000.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Cash inflow of Rs. 170
Investing activities are the purchase and sale of long-term assets and investments. For a non-financial enterprise, interest and dividends received are also investing inflows, while interest paid on a long-term loan is a financing outflow.
Purchase of fixed assets = (Rs. 350)
Sale of plant = Rs. 20
Interest received = Rs. 300
Dividend received = Rs. 200
Net cash from investing activities = −350 + 20 + 300 + 200 = Rs. 170 inflow
The plant is taken at its sale price of Rs. 20. Its cost and accumulated depreciation only show that it was sold at book value (Rs. 80 − Rs. 60 = Rs. 20). The Rs. 1,000 interest on the bank loan is left out, since it belongs to financing activities.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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