Free cash flow is simply the amount of cash a firm has to invest after all positive net present-value investments in its ongoing businesses have been funded.

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Free cash flow is the cash generated by a company's operations that is available for distribution among its creditors and investors after accounting for reinvestment in capital expenditures, debt repayments, and working capital needs. It represents the amount of cash a company has left over to pursue other investment opportunities, pay dividends, repurchase stock, or reduce debt.

Free Cash Flow Is Simply the Amount of Cash a Firm