FCFF from EBIT and EBITDA understand, different, learning, specific, contain

grharmeyer

I'm on my way to learning the eight different FCFF and FCFE formulas and for the time being I am not comfortable with the formulas that begin with EBIT and EBITDA. I searched the forum but did not find an answer. Below are my specific questions:

FCFF = [EBIT x (1-tax rate)] + Dep - FCInv - WCInv

I totally understand that you have to tax EBIT so that the cash flow to the firm must contain EBIT x (1-tax rate). Also, I see that you subtract FCInv and WCInv. The part that is not sitting well is that you add back all of the depreciation. Either way the FCFF figure is after tax so the depreciation should be after tax as well. Any pointers?