Free Cash Flow May Be Used for All of the Following

question 179

Multiple Choice

Free cash flow may be used for all of the following except:

• A)expanding the business.
• B)paying off debt.
• C)building up the cash balance.
• D)paying employees.

---

Definitions:

Accelerated Depreciation

A method of depreciation that allows a business to allocate larger portions of the cost of an asset to earlier years of its useful life.

Financing Costs

Expenses a company bears to finance its operations, including interest payments on debt, and costs associated with issuing new stock or debt.

Net Working Capital Requirement

The amount of current assets a company needs minus its current liabilities to continue its operations smoothly.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, representing the percentage of tax applied to your income for each tax bracket in which you qualify.