Question

The forecast of of a a company's future free cash flows will not be affected by

A. investments in working capital.

B. changes in depreciation and amortization.

C. investments in fixed assets.

D. all of these changes will impact free cash flows.

Answer #1

the forecast of a company's future free cash flows will be impacted by changes in rate of amortization or depreciation change because ultimately it will have to be affecting the free cash flows of the firm in the form of time value of money leading to higher or lower discounting.

Changes in working capital and investment in fixed asset will also impact the free cash flows to the company.

So the correct answer would be option( d)all of these with impact the free cash flows of the company.

So the correct answer about the option ( d)

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