Hilarious (and ridiculous) that CFAI did this on the 2012 mock which I just finished. I got this concept wrong: if you apply an EV multiple to a FCF number and want Equity Value, obviously you subtract debt. What I didn’t know is that you then have to go back and add cash/short term equivalents to the equity value which was subtracted in the EV. What a joke.
Not only that, but they subtract accounts payable as well and consider that debt. Wtf CFAI not cool.