Which of the Following Statements Is CORRECT

question 32

Multiple Choice

Which of the following statements is CORRECT?

• A)Operating cash flow (OCF) is defined as follows: OCF = EBIT(1-T) - Depreciation and Amortization.
• B)Changes in working capital have no effect on free cash flow.
• C)Free cash flow (FCF) is defined as follows: FCF = EBIT(1 - T)
• + Depreciation and Amortization
• - Capital expenditures required to sustain operations
• - Required changes in net operating working capital.
• D)Free cash flow (FCF) is defined as follows: FCF = EBIT(1-T)+ Depreciation and Amortization + Capital expenditures.
• E)Operating cash flow is the same as free cash flow (FCF).

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Definitions:

Cations

Positively charged ions that are formed when an atom loses one or more electrons, commonly found in various biological and chemical processes.

Anions

are negatively charged ions, which are atoms or molecules that have gained one or more electrons.

Compound

A substance made up of atoms of two or more different elements joined by chemical bonds.

Atoms

The basic units of matter consisting of a nucleus surrounded by electrons, forming the building blocks of all substances.