CFA CFA General A Free Practice Test for All CFA Level II Readers

A Free Practice Test for All CFA Level II Readers

  • This topic has 3 replies, 4 voices, and was last updated Apr-19 by devz.
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  • Zee Tan
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    fzimba
    Participant
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    Hello,

    I just took your L2 mock and am going through the debriefing. I was wondering if you could tell me where the 2,973 number for FCinv comes from? As far as I knew FCinv = Any additions for the year, and I’m getting the additions as follows:

    Opening PPE: 9,975
    Additions: 3,038
    Disposal: (65)
    Depreciation: (872)
    Ending PPE: 12,076

    Your Answer:
    Computing FCFF from net income
    Net income 1,975
    plus interest expense, after tax 356 532 * (1 – 0.33)
    Depreciation and amortization 872
    Net additions to property, plant, and equipment (2,973)
    (Increase) decrease in working capital (413) from CFS
    Increase (decrease) in deferred tax liability 26
    FCFF (157)

    Thanks!!

    Kodees
    Participant
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    Based on the values provided = Ending PPE – Beginning PPE + Depreciation
    = 12076-9975 + 872
    = 2973

    devz
    Participant
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    It’s also by subtracting the Disposals from the Additions: 3,038 – 65 = 2,973

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