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11 March, 16:18

Free cash flow is

a. all cash in the bank

b. cash from operations

c. cash from financing less

d. cash used to purchase fixed assets to maintain productive capacity and cash used for dividends

e. cash flow from operations less cash used to purchase fixed assets to maintain productive capacity

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Answers (1)
  1. 11 March, 19:06
    0
    The correct answer is letter "E": cash flow from operations less cash used to purchase fixed assets to maintain productive capacity.

    Explanation:

    Free cash flow or FCF is the money available for investors and creditors after subtracting the operational expenditures and investments from the sales of a company. FCF is not the same as net income because FCF does not include non-cash expenses but FCF considers capital investments and expenses. FCF could reflect more changes compared to the net income.
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