In order to calculate free cash flow by starting with incremental cash flow from operations, we should

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To calculate free cash flow starting with incremental cash flow from operations, you subtract both the incremental capital expenditures (which are cash outflows for investing in long-term assets) and the incremental additions to working capital (which represent cash tied up in the business operations and not available as free cash). This approach reflects the cash that is truly free for distribution to all stakeholders after maintaining or expanding the asset base.

In Order to Calculate Free Cash Flow by Starting with Incremental