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Which of the following statements is CORRECT? a. Managers should be less concerned with free cash flow than with accounting net income. Accounting net income
Which of the following statements is CORRECT? a. Managers should be less concerned with free cash flow than with accounting net income. Accounting net income is the bottom line and represents how much the firm can distribute to all its investors--both creditors and stockholders. b. Free cash flow (FCF) is defined as follows: FCF BIT(1-T) Capital expenditures. Most rapidly growing companies have positive free cash flows because cash flows from existing operations generally exceed Feed asset purchases and changes to net operatin working capital d. Changes in working capital have no effect on free cash flow. Free cash flow (FCF) is defined as follows FOF EBIT(1-) + Depreciation - Capital expenditures required to sustain operations - Required changes in net operating working capital
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