A company can increase free cash flows to the firm (FCFF) by doing which of the following?
A) Increasing investments in receivables, inventories, and plant assets
B) Decreasing investments in receivables, inventories, and plant assets
C) Maintaining a steady level of net operating profit after tax
D) Decreasing the level of net operating profit after tax.
E) None of the above

Question

Quizplus · Accepted Answer

Decreasing investments in receivables, inventories, and plant assets frees up cash that would otherwise be tied up, thus increasing free cash flows to the firm (FCFF).

A Company Can Increase Free Cash Flows to the Firm