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:

Eurobond

A bond denominated in a currency other than that of the country in which it is sold.

Denominated

Defined or stated in the context of a specific currency or measurement unit.

Currency

Medium of exchange, in the form of banknotes and coins, that is officially used in a country or economic region.

Foreign Bond

A bond denominated in the currency of the country in which it is sold, but issued by a foreign borrower.