Business, 21.04.2020 23:39 myrkaxsanchezz
Management can make any form of distribution to the firm’s shareholders using the company’s free cash flow (FCF). The underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.
Which of the following uses is considered to be a good use of free cash flow?
1.Invest in nonoperating assets
2.Invest in operating assets
3.Theoretically, there are some traditional ways of using FCF. If a company uses all of its FCF to pay off all of its debt, it would reap the maximum benefit from the tax-deductible component of interest payments toward the debt.
4.This statement is false because if the firm uses its FCF to pay off all of its debt, it would have and no deductible.
Answers: 2
Other questions on the subject: Business
Business, 22.06.2019 05:30, themaster66644
Financial information that is capable of making a difference in a decision is
Answers: 3
Business, 22.06.2019 11:00, littlesami105
Which ranks these careers that employers are most likely to hire from the least to the greatest?
Answers: 2
Business, 22.06.2019 12:50, axelsanchez7710
You are working on a bid to build two city parks a year for the next three years. this project requires the purchase of $249,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the three-year project life. ignore bonus depreciation. the equipment can be sold at the end of the project for $115,000. you will also need $18.000 in net working capital for the duration of the project. the fixed costs will be $37000 a year and the variable costs will be $148,000 per park. your required rate of return is 14 percent and your tax rate is 21 percent. what is the minimal amount you should bid per park? (round your answer to the nearest $100) (a) $214,300 (b) $214,100 (c) $212,500 (d) $208,200 (e) $208,400
Answers: 3
Business, 22.06.2019 21:10, kmacho9726
Krier industries has just completed its sales forecasts and its marketing department estimates that the company will sell 43,800 units during the upcoming year. in the past, management has maintained inventories of finished goods at approximately 3 months' sales. however, the estimated inventory at the start of the year of the budget period is only 7,300 units. sales occur evenly throughout the year. what is the estimated production level (units) for the first month of the upcoming budget year?
Answers: 3
You know the right answer?
Management can make any form of distribution to the firm’s shareholders using the company’s free cas...
Questions in other subjects:
Biology, 01.10.2019 07:30
Mathematics, 01.10.2019 07:30
Physics, 01.10.2019 07:30
Social Studies, 01.10.2019 07:30
