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.
The FIxed Assets given in the Question are Net of Dep.
Change in FC should be Gross, that is why DEP is added back.
Noted, thank you!!
if the given amounts are Gross, then you wouldn’t need to add back Dep. but because it’s Net, then you add back the Dep there.