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标题: FCFF Questin [打印本页]

作者: chunty 时间: 2011-7-11 20:02 标题: FCFF Questin

What is the company's FCFF?

Net income = 1,204
Depreciation/Amort = 293
Decrease working capital = 36
Interest Expense = 290
Additions to PP&E = 1,317
Disposition of PP&E (from cash flow statement) = 65
Tax Rate = 35%

This question drove me crazy. The answer is 404.5 = 1,204 + 293 + 36 + (290*.65) - 1317

Why do you not add back the 65. Shouldn't the FCInv be net of asset sales?

作者: profil 时间: 2011-7-11 20:02

if this was a 2009 mock question - there was an erratum on it -- they had forgotten to include it. However this was the only answer choice provided.

1204 + 293 + 36 -1317 + 290 (1-0.35) + 65 = 469.5 <-- this is the right answer.

CP

作者: liquidity 时间: 2011-7-11 20:02

Ok it was the 2009. Is the 2009 errata still accessible?

作者: BelalM 时间: 2011-7-11 20:02

CP shdn't we add the net amount ((65 sale price less BV (0)) * 1-.35)

i.e 446.75 instead of 469.5

作者: comp_sci_kid 时间: 2011-7-11 20:02

no... you add the entire investment (or sale value). No adjustment for taxes.

CP

作者: firat 时间: 2011-7-11 20:02

If the question included BV's etc it seems like you would be right. If not specified, I wouldn't make that assumption and I would go with CPs answer.

How do you have the 2009 Mock? (or...how do i get it???)

作者: kingstongal 时间: 2011-7-11 20:02

or you could just add the total CFI in this example. it is from the 2009 Mock

作者: ayaz_mahmud369 时间: 2011-7-11 20:02

anyone have the 2009 errata?

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