$29.$ Free cash flow $($FCF$)$ and net income $($NI$)$ differ in the following ways:

I$)$ net income is the return to shareholders, calculated after interest expense; free cash flow is calculated before interest.

II$)$ net income is calculated after various non$-$cash expenses, including depreciation; we add back depreciation when we calculate free cash flow.

III$)$ capital expenditures and investments in working capital do not appear in net income calculations; they do reduce free cash flows.

IV$)$ net income is never negative; free cash flows can be negative for rapidly growing firms, even if the firm is profitable, because investments exceed cash flows from operations.

A$.$ I only

B$.$IandIIonly

C$.$ I, II and III only

D$.$I,II$,$IIIandIV