Which of the Following Factors Is Excluded from the Calculation

question 85

Multiple Choice

Which of the following factors is excluded from the calculation of free cash flow to the firm?

• A) Principal repayments
• B) Operating income
• C) Depreciation
• D) The change in working capital
• E) Gross plant and equipment spending

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Definitions:

Special Discounted Price

A reduced price offered on goods or services, usually as part of a promotional deal or to certain groups of customers.

Idle Capacity

The portion of a company’s resources or assets that are not being used to their full potential, often leading to inefficiencies.

Minimum Acceptable Price

The lowest price at which a seller agrees to sell a product or service, ensuring that the sale still generates a profit or covers costs.

Special Order

Special order is an order for products or services that is outside the company's normal scope of operations or production schedules, often requiring unique specifications.