A Firm Reports That in a Certain Year It Had

question 14

Multiple Choice

A firm reports that in a certain year it had unlevered net income of $4.5 million,a capital cost allowance (CCA) deduction of $2.8 million,capital expenditures of $2.3 million,and net working capital decreased by $1.5 million.What is the firm's free cash flow for that year?

• A)$2.4 million
• B)$6.5 million
• C)$8.1 million
• D)$11.1 million
• E)$5.5 million

---

Definitions:

Thorndike's Law

The principle that behaviors followed by favorable consequences become more likely, and behaviors followed by unfavorable consequences become less likely, known as the law of effect.

Effect

Refers to the outcome or impact that results from a particular cause or action.

Positive Reinforcement

A process in behavior reinforcement where a behavior is encouraged by rewarding a desirable outcome.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a desired behavior strengthens that behavior.