Which free cash flow to the firm does not include interest

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Problem 1: Free cash Flow to the Firm (also known as "cash flow from assets") does not include interest expense because

Option 1: Assets do not produce interest expense, and interest expense is a cash flow to one set of claimants.

Option 2: Stockholders receive the interest.

Option 3: Because firms receive a tax deduction for interest.

Option 4: Interest is on the income statement.

Reference no: EM132987217

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