An investment outlay cash flow is Rs 2000, an operating cash flow is Rs 1500 and salvage cash flow is Rs 3000 then free cash flow would be

Rs 500.00
Rs 2,500.00
Rs 650.00
Rs 6,500.00

The correct answer is: B. Rs 2,500.00

Free cash flow is the cash flow available to a company after accounting for all expenses and investments. It is calculated by subtracting the investment outlay from the operating cash flow and adding the salvage cash flow.

In this case, the investment outlay is Rs 2000, the operating cash flow is Rs 1500, and the salvage cash flow is Rs 3000. Therefore, the free cash flow is:

Free cash flow = Operating cash flow – Investment outlay + Salvage cash flow
= Rs 1500 – Rs 2000 + Rs 3000
= Rs 2500

Option A is incorrect because it is the operating cash flow, not the free cash flow. Option C is incorrect because it is the difference between the operating cash flow and the investment outlay, not the free cash flow. Option D is incorrect because it is the sum of the operating cash flow, the investment outlay, and the salvage cash flow, not the free cash flow.

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