If Morris Corporation Has a Negative $131 Million Free Cash

question 125

Multiple Choice

If Morris Corporation has a negative $131 million free cash flow, which of the following statements is most likely true?

• A) Morris' capital expenditures plus its cash dividends are less than its cash provided by operations.
• B) This free cash flow indicates that Morris is in good shape to repay its long-term obligations when they come due.
• C) This free cash flow indicates that Morris presents good cash generating ability to retire stock.
• D) Morris' cash provided by operations is less than its cash dividends plus capital expenditures.

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Definitions:

Preoperational Period

A stage in Jean Piaget's theory of cognitive development (approximately ages 2-7) during which children begin to engage in symbolic play and struggle with logic.

Reality

The quality or state of being actual or true and the totality of all things possessing actuality, existence, or essence.

Appearance

The way in which someone or something looks or is presented to the senses.

Egocentrically

Thinking solely from one's own viewpoint, often with difficulty in understanding or considering the perspectives of others.