Free cash flow may be used for all of the following except:
A)expanding the business.
B)paying off debt.
C)building up the cash balance.
D)paying employees.

Question

Quizplus · Accepted Answer

Free cash flow is a positive cash flow from operating activities beyond what is needed to replace current property,plant,and equipment and pay cash dividends.Or,in other words,free cash flow equals cash flows from operating activities minus payments for property,plant and equipment and payments of cash dividends.Cash paid to employees is included in cash flow from operating activities.

Free Cash Flow May Be Used for All of the Following