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Cash outflows from financing activities include:dividends paid to shareholders.the lending of money to another business.payment of income tax.cash paid for the purchase of shares.

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Cash outflows from financing activities include:dividends paid to shareholders.the lending of money to another business.payment of income tax.cash paid for the purchase of shares.

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Solution

Cash outflows from financing activities include:

  1. Dividends paid to shareholders: When a company makes a profit, it can choose to distribute some of this profit back to its shareholders in the form of dividends. This is considered a cash outflow from financing activities because it is money being paid out to the company's financiers, i.e., its shareholders.

  2. The lending of money to another business: This is not typically considered a cash outflow from financing activities. Instead, it would be considered an investing activity, as the company is investing its cash in another business with the expectation of earning a return.

  3. Payment of income tax: This is not considered a cash outflow from financing activities. Instead, it is typically classified as an operating activity, as it is a regular and necessary part of running a business.

  4. Cash paid for the purchase of shares: If a company buys back its own shares from the open market, it is considered a cash outflow from financing activities. This is because the company is using its cash to reduce its financial obligations, i.e., the number of shares outstanding.

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