On January 1, 2009, SK Company pays $205,000 cash for factory equipment that has an estimated useful life of 10 years and an expected residual value of $5,000. What will the company report on its statement of cash flows for the year ended December 31, 2009?
Operating activity cash outflow of $(205,000)
Operating activity cash outflow of $(20,500)
Investing activity cash outflow of $(205,000)
Financing activity cash outflow of $(205,000)