i m totally lost on this type of q. when calculate FCInv, what should we do with disposition of ppe? say, during last year, additional ppe is 1000, while disposition is 400. then FCInv is 1000, or 600 (=1000-400). as far as i remember, some time ago, someone said we should use 600. but this question is likely assuming 1000. thx
sorry, my mistake, its Q22, not 21 any help?
I don’t know what the answer is to your specific question is, but Schweser definitely says to use purchases minus sales
thx guys. checked the cfai book, should use the difference. mock2 Q22 calculating FCFF uses 1317 instead of 1252(=1317-65). you may notice this if you are reading their answer.
so you’re saying that on Q22, CFAI made a mistake by leaving out the sales of PPE?
Yes, I agree with that too I am confused with the answers , but look at CFAI text vol 2, page 355. It says that you should take the net! So I think the mock exam answers is probably wrong…