FCFE question on depreciation / NCC
So FCFE = NI + NCC -FCInv -WCinv + net borrowing.
So if you have NI of 5, depreciation of 2, FCInv of 1, WCinv of 1 and 0 net borrowing, its pretty simple: 5+2-1-1+0 =5
However, some of the questions have a debt ratio and then the equation gets rewritten like this:
FCFE = NI - (FCInv - depreciation)*(1-d/r) - (WCInv * (1-dr)) + net borrowing
I understand the (1-dr) part, due to keeping the leverage the same.. However, where did NCC go? It seems like the two equations are inconsistent. The second equation, I’m subtracting depreciation and never adding it back from NI?