标题: Fixed Capital Investment Calculations [打印本页] 作者: meghanjackson 时间: 2011-7-11 20:08 标题: Fixed Capital Investment Calculations
SImple subject, but seems to trip me up. Can anyone explain how to calculate FCInv for the FCF calculations when it isnt given straight up? I know we can find the difference in Gross PPE between periods if there were no purhcases or sales. For some reason i always mess it up when there are disposals and purchases so would appreciate any tips.作者: b_sea93 时间: 2011-7-11 20:08
can you post a problem? I think you get the idea....see how much gross PP&E went up....but if there is a little note that they sold some equipment, then thats an inflow, which offsets what we spent, so take the "net FCinv"作者: zephyranalyst 时间: 2011-7-11 20:08
If you have gross PPE, then it's the change.
Gross PPE 20x1 = 10000
Gross PPE 20x2 = 15000
note: sold equipment for 2000
Well, FCInv would be 15000-10000 = 5000.
That's because the money you spent was 7000, but it was offset by the 2000 inflow.
Someone correct if wrong.
Gets more complex if net. Probably won't be asked.作者: firat 时间: 2011-7-11 20:08
dont forget current year depreciation exp.作者: brainsX 时间: 2011-7-11 20:08
happyen83 Wrote:
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> dont forget current year depreciation exp.
FcInv = delta(gross PPE)
or
= delta(net PPE) + current year depreciation作者: neil1234 时间: 2011-7-11 20:08
Ok, the part which I don't understand is how do we account for depreciation if the gross PPE never changes. For example, if the company reports its gross PPE as say $100 million and never expands its production so never purhases ADDITIONAL PPE then we'll always use $0 as FCInv in our FCFF or FCFE calculations.
Eventually some of the PPE will come to the end of its life and will be disposed of for $0 and REPLACEMENT PPE bought. If we dispose of PPE originally purchased for $10 million and replace it with new PPE worth $10 million, then gross PPE won't change and therefore FCInv remains at $0.
