Which of the Following Is True for Free Cash Flow

question 1

Multiple Choice

Which of the following is true for free cash flow?
I.Free cash flow is easier to calculate than operating cash flow.
II.Estimated capital expenditures are subtracted from operating cash flow.
III.Estimated capital expenditures are added to operating cash flow.
IV.A negative free cash flow indicates that the company needs additional financing.

• A)I,II,& III
• B)I & III
• C)III & IV
• D)II & IV

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Definitions:

Product Cost

refers to the total expense incurred to manufacture a product or deliver a service, encompassing direct labor, materials, and overhead costs.

Drill Bits

Tools used for creating cylindrical holes, often seen in various sizes and made from different materials suitable for specific drilling needs.

Assembly Area

A specific section in a manufacturing facility where components are put together to form the final product.

Materials Requisition

A document used in the manufacturing process to request the transfer of materials from the storeroom to the production floor.