Given the Following Data for a Given Period, Compute the Free

question 29

Multiple Choice

Given the following data for a given period, compute the free cash flow to the firm: Net Income = $12,000
After-tax Interest Expense = $2,000
Depreciation = $1,000
Increase in NWC = $2,000
Capital Expenditures = $1,000

• A) $10,000
• B) $11,000
• C) $12,000
• D) $13,000

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Definitions:

Credit

An accounting entry that increases liabilities and shareholders' equity or decreases assets.

Strategic Investments

Long-term investments made to support a company's core business operations and growth objectives, often involving substantial amounts of money.

Investments In Associates

Financial investments in other companies where the investor has significant influence but not full control, typically denoted by owning 20% to 50% of the voting stock.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental.