Which of the Following Measures the Operating Cash Flow a Project

question 42

Multiple Choice

Which of the following measures the operating cash flow a project produces minus the necessary investment in operating capital, and is as valid for proposed new projects as it is for the firm's current operations?

• A) Free cash flow
• B) Operating cash flow
• C) Investment in operating capital
• D) Sunk cash flow

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Definitions:

Partner's Investment

The total capital contributed to a partnership by its members, either in cash, property, or services.

Income Ratio

A financial metric that compares different streams of income to one another or to total income, often used in profitability analysis.

Liquidation

The process of closing a business, selling its assets to pay creditors, and distributing any remaining assets to the owners or shareholders.

Gains and Losses

Increases or decreases in equity from transactions and other events and circumstances affecting the entity, other than those relating to contributions from or distributions to equity participants.