Estimating Cash Flows Multiple Choice Questions with Answers – PDF Download

MCQ 1: The free cash flow is $12000, an operating cash flow is $4000, an investment outlay cash flow is $5000 then the salvage cash flow would be:

1. −$21000
2. 21000
3. −$3000
4. 3000

MCQ 2: The cash flows that should be considered for the decision in hand are classified as:

1. relevant cash flows
2. irrelevant cash flows
3. marginal cash flows
4. transaction cash flows

MCQ 3: The net investment in operating capital is $5000 and the net operating profit after taxes is $8000 then the free cash flow would be:

1. 13000
2. −$3000
3. 3000
4. −$13000

MCQ 4: The free cash flow is $17000 and the net investment in operating capital is $10000 then the net operating profit after taxes would be:

1. 7000
2. 27000
3. −$27000
4. −$7000

MCQ 5: An investment outlay cash flow is $2000, an operating cash flow is $1500 and the salvage cash flow is $3000 then the free cash flow would be:

1. 500
2. 2500
3. 0.065
4. 6500