The Costs Associated with Noninterest-Bearing Current Liabilities, Which Are Included

question 52

Multiple Choice

The costs associated with noninterest-bearing current liabilities, which are included in the firm's cost of sales and other operating expenses:

• A) are subtracted in the calculation of free cash flow from the firm (FCFF).
• B) are added in the calculation of FCFF.
• C) are not a factor in the calculation of FCFF.
• D) are added to the value of equity claims.

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Definitions:

Inherited

Pertains to assets, traits, or conditions passed down from parents to their offspring through genes or legal processes.

Judgment Creditors

Individuals or entities awarded a monetary judgment against a debtor in court.

Life Estate

A legal arrangement whereby a person (life tenant) has the right to use, occupy, and benefit from a property during their lifetime, but cannot sell it, and upon their death, it passes to a remainderman.

Strip-Mine

Strip-mining is an extractive mining technique used for surface mineral extraction, where layers of soil and rock are removed to access buried mineral or coal deposits.