Which of the Following Statements Is CORRECT

question 59

Multiple Choice

Which of the following statements is CORRECT?

• A) Net cash flow (NCF) is defined as follows:
• NCF = Net income - Depreciation and Amortization.
• B) Changes in working capital have no effect on free cash flow.
• C) Free cash flow (FCF) is defined as follows:
• FCF = EBIT(1 - T)
• + Depreciation and Amortization
• -Capital expenditures required to sustain operations
• -Required changes in net operating working capital.
• D) Free cash flow (FCF) is defined as follows:
• FCF = EBIT(1 -T)+ Depreciation and Amortization + Capital expenditures.
• E) Net cash flow is the same as free cash flow (FCF).

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Definitions:

Higher Pay Grade

A classification level within a pay structure that signifies higher pay based on criteria such as job complexity, responsibilities, or performance.

Compensation Costs

All expenses related to employee salaries, wages, benefits, and rewards, reflecting the total cost to an employer for securing the services of labor.

Hiring Freeze

A hiring freeze is a temporary pause on the recruitment process, usually adopted by organizations to reduce costs.

Variable Pay

Compensation that is dependent on performance or results achieved, as opposed to fixed salaries, incentivizing employees to achieve organizational goals.