Which One of the Following Statements About the Free Cash

question 31

Multiple Choice

Which one of the following statements about the free cash flow from the company (FCFC) approach is NOT true?

• A) The present value of these cash flows exceeds the total value of the company, or its enterprise value.
• B) We do not include the cash necessary to pay short-term liabilities that do not have interest charges associated with them, such as accounts payable and accrued expenses.
• C) The costs associated with non-interest-bearing current liabilities, which are included in the company's cost of sales and other operating expenses, are subtracted in the calculation of FCFC.
• D) the total value of the company, V_F, is calculated as the present value of the FCFC, discounted by the company's WACC.

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Definitions:

Inner Ear

Part of the ear that contains the sensory organs for hearing and balance; contains the bony and membranous labyrinth.

Oscillation

A repetitive variation or fluctuation, typically in time, of a system about a central value or between two or more different states.

Eyes

Organs of the visual system that allow one to perceive light and convert it into electrochemical signals for interpretation by the brain.

Palpebral Conjunctiva

Conjunctiva that covers the inner surface of the eyelids.