In the decline phase,the company continues to enjoy positive operating cash flows but stops spending cash on investing activities and instead uses its cash for financing activities such as repaying lenders and returning excess cash to shareholders.

Question

Quizplus · Accepted Answer

In the maturity phase,the company continues to enjoy positive operating cash flows but no longer has opportunities for expanding the business,so it stops spending cash on investing activities and instead uses its cash for financing activities such as repaying lenders and returning excess cash to shareholders.During the decline phase,a company's operating cash flows again become negative,prompting lenders to demand repayment of loans (i.e. ,negative financing cash flows).To fund these repayments,the company sells off its long-term assets,resulting in significantly positive investing cash flows.

In the Decline Phase,the Company Continues to Enjoy Positive Operating