tobeornottobe

You add Depreciation back explicitly to NI (or EBIT, EBITDA, etc) to account for the TAX benefit. So the net effect of adding back Depreciation is always = (tax)(Depreciation)

You still need to add it in your FCInv (IF you are given Net PPE) otherwise you understate how much you spent on PPE.

janardhanc Wrote:
-------------------------------------------------------
> I doubt if depreciation belongs in FCInv, because
> when calculating FCFF you add in NCC explicitly.
>
> FCInv = Net PPE (t) - Net PPE (t - 1) +
> Depreciation (t) ???



Edited 1 time(s). Last edit at Thursday, June 2, 2011 at 11:17AM by tiredofstudying.