Question: Free Cash Flow and Financing Activities: General Electric Company (Easy) The following summarizes free cash flows generated by General Electric from 2000- 2004 (in millions of dollars).
a. Explain why such a profitable firm as General Electtic can have negative free cash flow.
b. In 2005, the firm announced that the years of building its set of businesses was "largely behind it," so it would be slowing its investment activity. What is the likely effect on free cash flow? How will GEs financing activities likely change? What are the financing alternatives in light of the changed free cash flow(FCF)?