on question 1 if FCFF is defined as FCFF= NI + NCC+ INT ( 1-tax rate) -FC INv - WCinv how is it when “int Exp” goes up by 100 the change in FCFF is 0 . makes no sense? Must be an error ?
int exp goes up - net income goes down by the int (1-T) factor. you are adding the same int (1-T) back as part of fcff terms. so net impact is 0.