Which of the Following Statements Is CORRECT

question 4

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:

Managers

Managers are individuals responsible for controlling or administering an organization or group of staff, making decisions, and implementing actions to achieve goals.

New Venture

A business enterprise that has recently been established, characterized by new market offerings and potential for growth.

Risk Taker

An individual or entity that is willing to take on risk in pursuit of reward, often in the context of business or investment.

Private Enterprise

Businesses that are owned and operated by private individuals or groups, rather than being controlled or owned by the government.