Investment flows are associated with which activity?

Investment flows are primarily associated with cash flows tied to the purchase or sale of fixed assets and business equity. This definition encompasses the critical financial activities related to a company's investments, which are essential for long-term growth and operations.

When a business invests in fixed assets such as machinery, buildings, or technology, it is committing capital to enhance its productive capacity. These investments often require substantial cash outflows, representing the company's strategy to expand or improve its operations. Conversely, when a company sells these assets, it generates cash inflows, reflecting a return on investment. Additionally, investment flows include transactions related to acquiring or selling equity stakes in other companies, which also reflects strategic investment decisions.

This focus on fixed assets and equity contrasts with cash inflows from sales of goods, which pertain more to operational flows, cash distributions to shareholders as dividends that relate to financial management and return on investment, and cash generated from financing through loans, which is concerned with raising capital rather than investing it. Therefore, option B accurately encapsulates the essence of investment flows in a business finance context.