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

question 114

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 = $2000
Depreciation = $1000
Increase in NWC = $2000
Capital Expenditures = $1000

• A)$10,000
• B)$11,000
• C)$12,000
• D)$13,000
• E)$14,000

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Definitions:

Efficiently Allocated

The optimal distribution of resources among different possibilities to maximize productivity and utility.

Least Cost

The principle of choosing the option that provides the necessary level of benefit or utility at the minimum possible cost.

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) to make something for consumption.

Constant-cost Industry

An industry in which the costs of production do not change as the industry's total output changes.