All of the Following Statements About Free Cash Flow Are

question 163

Multiple Choice

All of the following statements about free cash flow are false except:

• A) Significant free cash flow indicates less potential to finance new investments.
• B) Free cash flow is most commonly calculated by subtracting capital expenditures from cash provided by operations and then adding cash dividends.
• C) Free cash flow is not reported on the statement of cash flows.
• D) Significant free cash flow indicates less potential to pay additional dividends.

Grasp the foundational ethical theories, including duty-based ethics, outcome-based ethics, and the principle of rights theory.

Distinguish between legal compliance and ethical decision-making beyond the law.

Understand the impact of laws, such as the Sarbanes-Oxley Act, on promoting ethical business practices.

Evaluate the effectiveness of industry codes of ethics based on leadership commitment to enforcement.

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Definitions:

Straight-Line Amortization

A method of evenly distributing the cost of an intangible asset over its useful life.

Total Interest Cost

The sum of all interest payments over the life of a loan, reflecting the true cost of borrowing.

Interest Paid

The amount paid by a borrower to a lender for the privilege of using borrowed money, typically expressed as an annual percentage of the loan outstanding.

Bond Discount

The gap between the nominal value of a bond and the price it fetches on the market when it is sold for an amount lower than its nominal value.