Question
In looking at Free Cash Flow, which of the following is NOT true? Select one: a. FCF is the amount of cash that if withdrawn
In looking at Free Cash Flow, which of the following is NOT true?
Select one:
a. FCF is the amount of cash that if withdrawn would harm the firm's ability to operate and to produce future cash flows.
b. FCF is the cash flow that is available for interest and dividends after the company has made necessary investments in current and fixed assets that are necessary to sustain ongoing operations.
c. If a firm is reporting its income in accordance with generally accepted accounting principles, then its net income as reported on the income statement should be equal to its free cash flow.
d. The value of any asset is the present value of the cash flows the asset is expected to provide. The cash flows a business is able to provide to its investors is its free cash flow. This is the reason that FCF is so important in finance.
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