Which set of Modified Free Cash Flows (MFCF) indicates a company that is increasing in value?

Modified Free Cash Flows (MFCF) indicate the cash generated by a company after accounting for capital expenditures and working capital needs. To determine which set of MFCF reflects a company that is increasing in value, we look for trends in the cash flows over time.

In the given choice, the values of MFCF are progressively increasing from negative to positive: starting at -25, then -10, moving to 0, and finally reaching 25 and 40. This trajectory demonstrates that the company is moving from a state of cash outflow (which typically indicates a loss in value) to positive cash inflows, suggesting an improvement in its financial performance.

The presence of initial negative values signifies the company is investing or reinvesting in its operations but transitions into a phase of profitability where it generates positive cash flows. The consistent increase in cash flow values reinforces that the company's financial health is improving, thus signaling an increasing company value. This is critical in M&A discussions, as potential acquirers are often interested in businesses with positive growth trends in cash flow.

In contrast, the other choices illustrate declines in cash flows or growth patterns that do not suggest continuing gains in value. This reinforces the understanding that escalating cash flows are