Free Cash Flow Is Defined As

question 80

Multiple Choice

Free cash flow is defined as:

• A)cash flows available for payments to stockholders of a firm after the firm has made payments to all others will claims against it.
• B)cash flows available for payments to stockholders and debt holders of a firm after the firm has made payments necessary to vendors.
• C)cash flows available for payments to stockholders and debt holders of a firm after the firm has made investments in assets necessary to sustain the ongoing operations of the firm.
• D)cash flows available for payments to stockholders and debt holders of a firm that would be tax-free to the recipients.

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Definitions:

Total Materials Variance

The difference between the actual cost of materials used in production and their standard cost, reflecting efficiency or inefficiency.

Materials Quantity Variance

The difference between the expected and actual quantities of materials used in production, valued at the standard cost.

Production Department

A division within a company that is responsible for the manufacture of goods.

Investigation

The systematic examination or inquiry into something to establish facts and reach new conclusions.