Accounting statements represent a company's eamings, but this is not the real cash that a company generates, Eamings 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? Cash fows generated by operating the business Residual cash fow after taking into sccount operating cash flows, including fixed asset acquisitions, asset sales, and working capital expenditures Suppose you are the only owner of a chain of coffee shops near universities. Your current cafis are doing well, but you are interested in starting a fine-dining restourant. 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 $75,000 in eBr. - The corporate tax rate applicable to your business is 35%. - The depreciation expense reported in the financial statements is $14,286, - You don' need to spend any money for new equipment in your existing cats; however, you do need $11,250 to increase current assets in the form of cash. - As a strategic move, you decide to buy more supplies by credit to ensure that you don't run out. You purchase additional supplies worth 56,000 . - It is aiso estimated that your accruals will increase by $3,750. Based on your evaluation, you have in free cosh flow. Can a campany have negative free cash flow? Yes No