Which argument would not support the claim that free cash flow is a better measure of corporate performance than net income?

Free cash flow is often seen as a more reliable measure of corporate performance compared to net income due to its focus on actual cash generation. The correct argument, which states that net income is a measure that investors might not fully understand, highlights a misunderstanding of net income’s role rather than a deficiency in its capacity to measure corporate performance.

While it's true that net income can sometimes be influenced by complex accounting practices and does not inherently indicate cash availability, investor comprehension of net income does not diminish its potential value as a metric. Free cash flow paints a clearer picture of a company's financial health by showing the cash available to investors after capital expenditures, which is crucial for assessing whether a company can sustain dividends, reinvest, or reduce debt.

Thus, understanding how businesses report net income should not detract from its utility in performance measurement. It's important that investors possess financial literacy to interpret both net income and free cash flow, rather than dismissing net income because of perceived misunderstandings. The other arguments all highlight real limitations of net income that underline the advantages of using free cash flow as a performance measure.