For the FCFF calculation:
A)we must examine changes in net working capital.
B)a firm that is not growing may be expected to have no changes in net working capital.
C)it is important to consider only incremental or changing working capital needs.
D)all of the above are true.

Question

Quizplus · Accepted Answer

All three statements are true. For the FCFF calculation, we must examine changes in net working capital. If a firm is not growing, we may expect to have no changes in net working capital. And it is important to consider only incremental or changing working capital needs. Therefore, choice D is the best answer.

For the FCFF Calculation