Equity: FCFF plant, property

Houjichasan

when calculate FCFF, do we need to add back the disposition of property, plant and equitpment? thanks.

amqata

Re: Equity: FCFF new
Posted by: markCFAIL (IP Logged) [hide posts from this user]
Date: June 3, 2010 04:36PM
Thats what i was saying brazil, the text (at least schweser and i believe CFAI) says you net the two, but i did a CFAI mock that used only the expenditure and did not net out the disposition, which i believe is incorrect.”
Would you happen to know what question that was?

dece2011

If you only sold existing PPE and didn’t invest in any further PPE, yes you would add it back.
FCFF: NI+NCC+[int(1-Tax Rate0)]-FcInv-WcInv. If you disposed PPE (again assuming you’re there’s no net investment in fixed capital) you would add it to FCFF.