help on question 1 pg 240 vol 4 equity - possible error ? possible, question, equity, change, error

lxwarr30

on question 1 if FCFF is defined as
FCFF= NI + NCC+ INT ( 1-tax rate) -FC INv - WCinv
how is it when “int Exp” goes up by 100 the change in FCFF is 0 . makes no sense? Must be an error ?

slackeranalyst

int exp goes up - net income goes down by the int (1-T) factor.
you are adding the same int (1-T) back as part of fcff terms.
so net impact is 0.