A Company Can Increase Its Free Cash Flow by All

question 7

Multiple Choice

A company can increase its free cash flow by all of the following EXCEPT

• A) receiving increased dividend income.
• B) increasing spending on property, plant, and equipment.
• C) speeding up the collection of accounts receivable.
• D) decreasing payments to suppliers.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, presenting a structured report of financial performance over a specific period.

Scienter

A legal term referring to the knowledge of wrongdoing or fraudulent intent in actions leading to harm or damage.

CPA Firm

A company that provides accounting, auditing, tax, and business consulting services, staffed by certified public accountants (CPAs).

Ultramares Rule

A legal doctrine limiting the liability of auditors to third parties in cases of negligence, unless a prima facie case of fraud could be proven.