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School

Embry-Riddle Aeronautical University *

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Course

116A

Subject

Finance

Date

Jan 9, 2024

Type

png

Pages

1

Uploaded by johnnycush

Report
Problem #1 - Correct Which of the following is not used in the computation or ratio of free cash flow? a. Sales ¥ “b. Net income c. Cash used to purchase property, plant, and equipment d. Net cash flows from operating activities Feedback Correct. Net income is not used in the computation or ratio of free cash flow. Problem #2 - Incorrect Which of the following statements regarding free cash flow is true? X a. Free cash flow measures the operating cash flow of a company after the purchase of inventory. b. Free cash flow is a valuable tool for evaluating net income. ¥ c. Free cash flow is a valuable tool for evaluating cash flows. d. Free cash flow ignores productive capacity. Feedback Incorrect. Free cash flow the operating cash flow available to a company to use after purchasing the PP&E y to maintain current productive capacity. Free cash flow is a valuable tool for evaluating cash flows.
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