The correct answer is $\boxed{\text{B. Rs 8,000.00}}$.
Free cash flow is the cash flow available for distribution to investors after taking into account all operating, investing, and financing activities. It is calculated as follows:
Free cash flow = Operating cash flow – Capital expenditure + Salvage value
In this case, the investment outlay cash flow is Rs 4000, the operating cash flow is Rs 1000, and the salvage cash flow is Rs 5000. Therefore, the free cash flow is:
Free cash flow = Rs 1000 – Rs 4000 + Rs 5000 = Rs 8000.00
Option A is incorrect because it is the total cash flow, not the free cash flow. Option C is incorrect because it is the investment outlay cash flow, not the free cash flow. Option D is incorrect because it is not one of the possible answers.