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Which of the following statements is CORRECT? Group of answer choices Managers should be less concerned with free cash flow than with accounting net income.
Which of the following statements is CORRECT? Group of answer choices 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 investorsboth creditors and stockholders. Most rapidly growing companies have positive free cash flows because cash flows from existing operations generally exceed fixed asset purchases and changes to net operating working capital. Free cash flow (FCF) is defined as the amount of cash available from operations for distribution to all investors (including stockholders and debtholders) and can be withdrawn without harming a firm's ability to operate and produce future cash flows. Free cash flow (FCF) is defined as follows: FCF = EBIT(1 - T) + Capital expenditures
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