How Does "Free Cash Flow" Differ from Net Profit

question 43

Multiple Choice

How does "free cash flow" differ from net profit?

• A)It is determined by accrual basis accounting.
• B)It takes into consideration a firm's ongoing investment in working capital and fixed assets.
• C)It ignores depreciation and taxes.
• D)It is less expensive.

Differentiate between static and flexible budgets and their implications for managerial control.

Recognize the role of decentralization in organizational control and operations.

Understand the concept of controllable margin and its use in profit center evaluations.

Distinguish between cost centers and profit centers and their evaluative metrics.

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Definitions:

Histrionic Personality Disorder

A mental disorder characterized by a pattern of excessive emotionality and attention-seeking, including inappropriate seductiveness and an overly dramatic attitude.

Hysterical

An outdated term historically used to describe excessive or uncontrollable emotion or excitement; now more commonly refers to being extremely funny.

Sociopath

A term used to describe a person with antisocial personality disorder, characterized by a disregard for the rights and feelings of others and often engaging in manipulative and criminal behavior.

Psychopath

An individual with a personality disorder characterized by persistent antisocial behavior, impaired empathy and remorse, and bold, disinhibited, and egotistical traits.