6. Free cash flow Accounting statements represent a company's earnings, but this is not the real cash that a company generates. Earnings data can be manipulated and can be deceiving. Thus, corporate decision makers and security analysts focus on the free cash flow that a firm generates to analyze the company's real cash position. Which of the following statements best describes free cash flow? The amount of a firm's available cash used to write off capital expenditures and depreciation The amount of a firm's available cash that can be used without harming operations or the ability to produce future cash flows Suppose you are the only owner of a chain of coffee shops near universities. Your current cafes are doing well, but you are interested in starting a fine dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financial performance Suppose you are the only owner of a chain of coffee shops near universities. Your current cafs are doing well, but you are interested in starting a Tine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financial performance: Financial update as of June 15 . Your existing business generates $87,000 in EBIT. The corporate tax rate applicable to your business is 35%. The depreciation expense reported in the financial statements is $16,571. You don't need to spend any money for new equipment in your existing cafs, however, you do need $13,050 of additional cash. . You also need to purchase $6,960 in additional supplies-such as cloth, tableclothes and napkins, and more formal tableware-on credit It is also estimated that your accruals, including taxes and wages payable, will increase by $4,350. Based on your evaluation you have in free cash flow. Free cash flow can be used for varid cash flow? $103,57113,050 bg distributing it to stockholders and debtholders. Which of the following is not a use of free $64,421 Acquiring operating asser $77,471 Retiring debt-that is, to $107,921 Free cash flow can be used for various reasons, including distributing it to stockholders and debtholders. Which of the following is not a use of free cash flow? Acquiring operating assets Retiring debt-that is, to pay off debt