Which of the Following Would Cause Free Cash Flow to Differ

question 46

Multiple Choice

Which of the following would cause free cash flow to differ from operating cash flow when an investment project is terminated?

• A) Sale of assets
• B) Recovery of net working capital
• C) Income taxes
• D) All of the above

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Definitions:

Externalities

Financial consequences for unrelated third parties, which can manifest as either positive or negative effects.

Perfectly Competitive

Describes a market structure where many firms sell identical products, there are no barriers to entry, and no single buyer or seller can influence the market price.

Allocate Resources

The process of distributing available resources, such as labor, capital, and land, among various uses to fulfill societal needs and wants.

Consumer Surplus

The deviation between the monetary amount consumers are willing to pay for a good or service and the monetary amount they actually pay.