Free cash flow is calculated as
A)net income minus net capital expenditures minus dividends paid.
B)net income minus dividends paid.
C)net cash provided (used)by operating activities minus net capital expenditures minus dividends paid.
D)net cash provided (used)by investing activities minus net capital expenditures minus dividends paid.

Question

Quizplus · Accepted Answer

Free cash flow is calculated as net cash provided by operating activities minus net capital expenditures. It measures how much cash a company generates after accounting for capital expenditures needed to maintain or expand its asset base. Dividends paid are not subtracted in the calculation of free cash flow; they are part of the financing activities.

Free Cash Flow Is Calculated as