fcfe ebit double check

CFA Level II Equities
#1

Saw this question on wiley:

EBIT 1,456 Average tax rate 30% Marginal tax rate 38% Depreciation 3,316 Working capital investment 1,310 Fixed capital investment 2,911 New borrowing 2,688

Assuming Remley’s only non-cash charge is depreciation expense, the analyst will calculate FCFE closest to:

My question: Since we start with EBIT, shouldnt the question give the interest which would be required to deduct I(1-T) in order to get FCFE? Or they should state there are no interest charges?

#2

It’s true, interest expense is needed when calculating FCFE from EBIT. Have you seen the Wiley’s errata? Send an email to them anyway.

BR