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22 October, 16:35

Free cash flow can be used for various reasons, including distributing it to stockholders and debtholders. Which of the following is not a use of free cash flow? Acquiring operating assetsRetiring debt-that is, to pay off debt

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  1. 22 October, 18:26
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    The correct answer is letter "A": Acquiring operating assets.

    Explanation:

    Free cash flow refers to the available money a company has after covering all its liabilities and expenses. This money is usually distributed among the firm's investors - stakeholders - and creditors. The Free Cash Flow is not equal to net income because it does not include non-cash expenses but takes into consideration the expenses on company equipment and changes in working capital.

    Then, the free cash flow is not destined for acquiring operating assets.
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