💼 Pre-MBA Exam Prep

Free cash flow to the firm (FCFF) is calculated as:

A Revenue minus expenses
B Operating income after taxes plus depreciation minus capital expenditures minus changes in working capital
C Net income only
D Dividends paid

✓ Correct Answer: Option B

FCFF = NOPAT + Depreciation - CapEx - ΔWorking Capital. Represents cash available to all capital providers (debt and equity holders). Used in DCF valuation.

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