CFAI Mock Exam (AM) Qn 50 - FCFF

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Norest's picture

When calculating the change in FCInv, the answer sheet adds back depreciation ($61):

(1,203 − 1,130) + 61 = –134

Can someone explain the intuition behind this? I don’t get it since $61 is already added via Non-cash charges.

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nospe690's picture

You’re not adding depreciation twice, you’re just trying to find the change in gross PPE so that you can find WCINV

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