A company has its Fixed Assets 'opening and closing Balances', ₹50,000 and ₹1,50,000 respectively. Depreciation charged during the year was ₹20,000. Calculate the cash flow from investing activities?

₹1,20,000 Outflow

The correct answer is option 2- ₹1,20,000 Outflow.

Purchases = Closing bal + Depreciation - Opening bal
                 = 1,50,000 + 20,000 - 50,000
                 = 1,20,000

As it is purchases so it is an outflow of cash for the investing activity.

FIXED ASSET A/c