Question

Free cash flow describes the net cash provided by operating activities after adjusting for A : current liabilities. B : both capital expenditure and dividends paid. C : capital expenditures only. D : dividends paid only.

Answer 1

The answer is B, both capital expenditure and dividends paid.

Step-by-step explanation:

In the Statement os Cash Flow, cash provided by operating activities fails to take into account that a company must invest in a new property, plant, and equipment and must maintain dividends at current levels to satisfy investors.

Free cash flow describer the net cash provided by operating activities after adjusting for capital expenditures and dividens paid.