Calculate a Firm's Free Cash Flow If It Has Net

question 22

Multiple Choice

Calculate a firm's free cash flow if it has net operating profit after taxes of £60,000, depreciation expense of £10,000, net fixed asset investment requirement of £40,000, a net current asset requirement of £30,000 and a tax rate of 30%.

• A) £30,000
• B) £0
• C) £(30,000)
• D) none of the above.

---

Definitions:

Working Backward

A problem-solving strategy involving starting with the desired final outcome and progressively working towards the starting point to find a solution.

Stairs

Constructed steps that allow people or animals to move from one level to another, typically within buildings or outdoor structures.

Mental Set

A psychological inclination to approach situations in a certain way, based on prior experiences and perceptions, which can impact problem-solving and behavior.

Small Business

A privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business.