Question

Read the news item given below and answer the questions which follow:

Tata Consultancy Services ₹ 17,000 crore share buyback programme will open on December 1 and close on December 7, India’s largest software exporter said on Tuesday. “The company believes that the buyback is not likely to cause any material impact on the profitability or earnings of the company except to the extent of reduction in the amount available for investment, which the company could have otherwise deployed towards generating investment income”, TCS said in a regulatory filing.

How would the Cash Flow from Investing Activities of TCS be affected, if instead of buying back its shares, the company had proceeded with its investing programme? 

Answer 1

1. Outflow of cash to the extent of investment made.
2. Inflow of cash – interest income from the investments.