The following questions seek to evaluate the concepts related to free cash flow / Cash Flow Available After Taxes.
From the following statements say, which is true (V) and which is false (F), in case it is false justify your answer, if not justify will have a score of 0 points in that literal.
a) Ernesto is the partner of a company of electrical services, after seeing the free cash flow in the board of directors, he assures his partners that the amount of money available is to distribute dividends among them, since that figure reflects the cash flows (surplus or requirements) after deducting the operational expenses, including payments associated with the debt.
b) The free cash flow will always be equal to the net income recorded in the statement of result as long as there are no ineffective expenses.
c) By constructing the free cash flow for a project you can conclude that a decrease in accounts receivable implies a decrease in the liquidity of that project.
d) You are an expert in project evaluation and you are calculating a free cash flow. For this purpose, it contemplates depreciation expense, since this is an outflow of cash and for this reason must be added to the EBIT within the free cash flow.
e) The financial manager of a construction company tells the board of directors to reevaluate if it is convenient to carry out the "Sendero Vereda del Carmen" project because it increased the opportunity cost with which the project was being evaluated and for therefore all indicators of financial goodness are lower
f) Antonia is the financial director of the renowned brand of natural juices Tuturumaina SAS. Currently the company has liquidity problems, so she proposes to her bosses to increase the days of accounts receivable and reduce the days of accounts payable. She assures that this change will help the company to have greater liquidity.
g) Helena is building the free cash flows of her PANKE project, the innovative Express confectionery business. Within her financial analysis, she chooses that all her pastry machinery be depreciated by the decelerated methods, because in present value they are those that generate a greater tax saving.
h) Enrique is the director of the Manuelita rice plant and in the last year of the project he directs, he receives the offer to sell one of his tractors above his current price (book value). Enrique is determined to do the business, since it is an occasional income that he did not expect to have in the last year of the project, so he must ask the financial analyst to generate the corresponding tax savings.
i) Esteban requested a loan for his business, for which he must include in the free cash flow the interest generated by said debt, since this is an effective expense.