Which principle would not be encouraged by the CFO to maximize free cash flow?

The principle that would not be encouraged by the CFO to maximize free cash flow is increasing the depreciable life of existing assets. While extending the depreciable life of assets can result in lower reported depreciation expenses and therefore appear to improve net income, it does not directly enhance cash flow. Depreciation is a non-cash expense, so changes to its timing do not affect the actual cash generated by the operations.

Instead, CFOs focus on measures that lead to increased cash availability for the company. Reducing operating costs through efficiency measures, optimizing asset sales, and improving inventory management are all strategies that enhance free cash flow by either reducing outlays or increasing cash inflows. For example, operational efficiency can decrease costs, optimizing asset sales can yield cash for underperforming assets, and better inventory management can reduce excess stock, freeing up capital. Thus, the strategy of increasing the depreciable life of assets may not align with immediate cash generation goals, making it less appealing from a cash flow maximization perspective.