A Firm's Net Investment Is

question 23

Multiple Choice

A firm's net investment is:

• A)its capital expenditures in excess of depreciation.
• B)its free cash flow net of increases in working capital.
• C)its enterprise value in excess of debt owed.
• D)the market value of equity plus debt.

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes and costs, have been deducted from total revenue.

Equity Method

The equity method is an accounting technique used to assess the investments in other companies, where the investment is recorded at original cost and adjusted according to the investor’s share of the investee's profit or loss.

Intra-entity Inventory

Transactions involving the exchange of goods between divisions within the same company, often for consolidation or reallocation purposes.

Gross Profit

The disparity between sales income and the expense of goods sold, prior to considering additional expenditures.