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Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

Would it be possible for a company to report negative free cash flow and still be highly valued by investors; that is, could a negative free cash flow ever be viewed optimistically by investors? Explain your answer.

Summary Introduction

To explain: The negative free cash flow and its evaluation by investors.

Introduction:

Free Cash Flow: The cash generated over and above required by business operations and capital expenditure is called free cash flow. Statement of cash flow reports generated net amount of cash or consumed by the business.

Explanation
  • The total cash generated by a company is used to support its operation and for growth purposes as investments in the long term assets or other expansion plans...

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