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Management · Q511

Financial Management

Graduate and Post Graduate · Management · question 511

Q511

Net investment in operating capital is Rs 5000 and net operating profit after taxes is Rs 8000 then free cash flow would be

A.
Rs 13,000.00
B.
-Rs 3,000.00
C.
Rs 3,000.00
Answer
D.
-Rs 13,000.00

Answer: Option C

Solution

Answer: Option C
Solution:
Free cash flow = Operating profit after tax - Net investment in operating capital
= 8000 - 5000 = Rs. 3000.