Which of These Statements Related to Free Cash Flow Is

question 99

Multiple Choice

Which of these statements related to free cash flow is correct?

• A)free cash flow must be fully distributed to the firm's debtors and shareholders.
• B)free cash flow must be positive for a firm to acquire new fixed assets.
• C)all, or part, of free cash flow can be used to increase a firm's cash reserves.
• D)when capital expenditures are positive, free cash flow will exceed the cash flow from operations.

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Definitions:

International Price

The price of goods or services considered on a global scale, often affected by exchange rates, tariffs, and global supply and demand.

US$ Per C$

A currency exchange rate that shows how much US dollars is worth in Canadian dollars.

Importer

An individual or company that buys goods or services from abroad for sale in their home country.

Service Charge

A fee collected by a bank, institution, or service provider for the provision of a service, often associated with transactions or account maintenance.