Which of the following statements is CORRECT?
A. A shortcut to calculate free cash flow (FCF) is defined as follows:
FCF = Net income + Depreciation and Amortization.
B. Changes in working capital have no effect on free cash flow.
C. Free cash flow (FCF) is defined as follows:FCF = EBIT(1 ? T) + Depreciation and Amortization ? Capital expenditures required to sustain operations ? Required changes in net operating working capital.
D. Free cash flow (FCF) is defined as follows:FCF = EBIT(1 ? T)+ Depreciation and Amortization + Capital expenditures.
E. Net cash provided (used) by operations is the same as free cash flow (FCF).
Answer: C
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