The Guiding Rule in Deciding If a Free Cash Flow

question 17

True/False

The guiding rule in deciding if a free cash flow is incremental is to look at the company with,versus without,the new project.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members from earnings, typically in the form of cash.

Net Income

The amount of money remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Indirect Method

A financial reporting approach used primarily for cash flow statements that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Cash Dividends

Payments made by a company to its shareholders out of its profits or reserves.