fzimba

[fzimba]

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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!!

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