A buddy showed me today a sample/mock exam where the solution to a FCFF calculation only included the additions (investments) of fixed assets, as outflows in the calculation. However, the data given in the vignette also has some disposals, in the same period that generated cash, but the solution ignored these. Should those inflows not be included? Is the formula not as per below: FCFF = NI + Dep + Int (1-t) - DELTA WC - DELTA FINV or is it FCFF = NI + Dep + Int (1-t) - DELTA WC - FINV. ?? Thanks for any guidance.
If it is from this year’s mock, CFAI made an error. There is a thread on this somewhere.