Free cash flow is equal to the cash flow from operating activities less cash payments:
A) to retire bonds.
B) for inventory purchases.
C) for planned investments and cash dividends.
D) for planned salary raises.

Question

Quizplus · Accepted Answer

Free cash flow represents the amount of cash available to the company after taking into account all its expenses including planned investments and cash dividends. Therefore, options A, B, and D are not considered in the calculation of free cash flow.

Free Cash Flow Is Equal to the Cash Flow from Operating