Which of the Following Is NOT Included in the Calculation

question 46

Multiple Choice

Which of the following is NOT included in the calculation of free cash flows?

• A)Interest expense
• B)Operating income
• C)Depreciation
• D)Net operating working capital

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Definitions:

Interest

The cost of using someone else's money or the return on invested capital.

Land Improvements

Enhancements made to a plot of land to increase its value, such as landscaping, fencing, and installing irrigation systems.

Fixed Assets

Long-term tangible assets used in business operations, not expected to be converted into cash within a year, such as buildings and machinery.

Current Assets

Items of value that are likely to be cashed in, sold, or expended within the span of a year or throughout the usual functioning period of the company, whichever period lasts longer.