Question

Which of the following reduces free cash flow to firm (FCF

Q: Answer-Which of the following reduces free cash flow to firm (FCFF)?

An increase in working capital e.g., higher receivables or inventory represents cash being tied up in operations, which reduces Free Cash Flow to the Firm FCFF. Depreciation is added back as it is non-cash.

A Depreciation charged (non-cash)

B Increase in working capital (higher receivables)

C Reduction in capital expenditure

D Decrease in taxes paid

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Which of the following reduces free cash flow to firm (FCF

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