reading 46, page 689, question 9: the solution include the capital expenditures on current sale which is 125% of depreciation to support the current level of revenues. I don’t think it should included in the FCInv, which only include the net change of fixed investment. isn’t it? Thanks.
No, you subtract both of those capex requirements…NOT the change. Normally when calculating FCFF or FCFE you deduct the CHANGE in WORKING CAPITAL, not FCinv/capex