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Management · Q518

Financial Management

Graduate and Post Graduate · Management · question 518

Q518

Net investment in operating capital is Rs 7000 and net operating profit after taxes is Rs 11,000 then free cash flow will be

A.
-Rs 18,000.00
B.
Rs 18,000.00
C.
-Rs 4,000.00
D.
Rs 4,000.00
Answer

Answer: Option D

Solution

Answer: Option D
Solution:
Free cash flow = Net operating profit after taxes - Net investment in operating capital
= 11000 - 7000 = Rs. 4000.