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

question 17

Multiple Choice

Given the following data for a given period, compute the free cash flow to the firm: Net Income = $10,000
After-tax Interest Expense = $1,000
Depreciation = $1,000
Increase in NWC = $1,000
Capital Expenditures = $2,000

• A) $9,000
• B) $9,500
• C) $9,700
• D) $9,900

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Definitions:

Keynes

refers to John Maynard Keynes, a British economist whose theories on the causes of prolonged unemployment and recommendations for government intervention in economies to stimulate demand and control inflation have had a significant influence on modern macroeconomics.

Aggregate Supply

The total supply of goods and services that firms in a national economy plan to sell during a specific time period.

Aggregate Demand

The total demand for goods and services within an economy at a given time and price level.

Keynesians

Economists and theorists who believe in the economic principles of John Maynard Keynes, emphasizing the need for government intervention to manage economic cycles.