genuinecfa

I pay interest of $10 million. Assuming a 30% tax rate, i reduced my taxes by $3 million (for a net cash interest expense of $7 million). Therefore, i add back my net interest expense ($7 million) to get to FCFF

I record depreciation of $100 million, which reduces my taxes by $30 million. I must add back the entire $100 million, because it was a non cash expense, and I'm trying to arrive at a cash number.