Free cash flow provides an indication of a companys ability to: (a) generate net income. (b) generate

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“Free cash flow provides an indication of a company’s ability to:

(a) generate net income.

(b) generate cash to pay dividends.

(c) generate cash to invest in new capital expenditures.

(d) both

(b) and (c).

Questions 13 and 14 apply only to the direct method.

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Financial Accounting Tools For Business Decision Making

ISBN: 9780471730514

4th Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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