topher Wrote: ------------------------------------------------------- > danielsky Wrote: > -------------------------------------------------- > ----- > > I did my careful cals on this set of questions, > B > > is right! using > > FCFE = NI - (1-D.R.) (FC+WC- Depreciation) and > > multi-stage. > > > I never had to use this equation yesterday. I was > able to get to the correct answer using FCFE = NI > + NCC - FCInv - WCInv + net borrowing same here
JasonU Wrote: ------------------------------------------------------- > sales were like 3500 and 4200, net income was > given as like 18% of sales and then you add back > depreciation which was 10% subtract FCinv which > was xx% subtract WCinc which was xx% and add back > the borrowing off the FCinv which was like 17.5% > of FCinv > > then you discount the first one back (1+x) and the > second one (1+x)^2, then they gave a terminal > value for 2010 which you discount back (1+x)^2 > > I dont remember the answer but I think it was the > 2310 i think i just used 2009 and terminal value. no 2010. fml.
Chasinggoats - I clearly remember reading the same thing, and getting the same answer - picked one closest to it… 
What about the question that had 2011 FCFE and wanted 2010 Terminal value? I took the TV for 2011 and discounted it back 1 period by the required rate of return.
yeah, that 3 year PV question does’nt have answers closest is B First FCFE I believe I choose answer C
kevincwang Wrote: ------------------------------------------------------- > yeah, that 3 year PV question does’nt have > answers > > closest is B > > First FCFE I believe I choose answer C I choose C as well…lucky guess if it was right. C was my go to option if I had to guess…the odds fell in my favor if it was right… I choose B for the second FCFF/FCFE question i think. They gave you terminal value and you had to discount it back two periods? sound right?
wohoooo thats what i got!!!
Chasinggoats: I remember this as well. The problem stated that FIXED CAPITAL investment would be funded by 18.75% debt. And depreciation and WC are given as a % of revenue. So I did NI - (1-D)*(FCInv) + Depr - WCInv. I was able to get an answer that matches one of the choices.
was that formula NI - (1-D)(FCinv - DEP) - WCinc(1-D)??
. Banny picked B and so did I 
yorkville Wrote: ------------------------------------------------------- > Chasinggoats: > > I remember this as well. The problem stated that > FIXED CAPITAL investment would be funded by 18.75% > debt. And depreciation and WC are given as a % of > revenue. So I did NI - (1-D)*(FCInv) + Depr - > WCInv. I was able to get an answer that matches > one of the choices. ditto on this, not sure if it was right
i fucked up with this formula with DR and just made pure guess
I calculated with NI - (1-D)(FCinv - DEP) - WCinc(1-D), however this gets you FCFEE for a single year, I guess we needed FCFE for 2 years, So went to more basic one while also considering effect of 20% debt on net borrowing, however answer I got didnt match anything, went for 2400 as it was closest 
prabhashverma Wrote: ------------------------------------------------------- > I calculated with NI - (1-D)(FCinv - DEP) - > WCinc(1-D), however this gets you FCFEE for a > single year, I guess we needed FCFE for 2 years, Do that twice, then you got 2 years.
I also said B. But I spent a while on this at the end cuz it said what is the VALUE OF VIDA(or whatever the firm name was), and we were using the FCFE model. So, I was trying to figure out the mkt value of debt to add to my FCFE valuation number. After a while, I said F it and picked B cuz it was close to my FCFE number.
How did everyone calculate the WCInv amount? I guess it should be the change from year to year. I remember it was given in the question as a % of sales, so we have to subtract the previous year amount from the current amount to get the change. I could not remember if I did that or not.
Yorkville, I did it both ways to see if the CFAI was being that nitpicky about it, but using the change in NWC didn’t get you to any of the answer choices, so I defaulted to the % amount (then also re-read the question and it said growth in NWC, so that confirmed my beliefs). I smoked that vignette that a tampon-sized joint.
Skillionaire If the vignette stated the change in NWC as % of sale, then the original formula I listed is correct: FCFE = NI - (1-D)*(FCInv) + Depr - WCInv
Not sure what you’re talking about, but that formula above is not correct.
FCFE = NI - (1-D)*(FCInv) + Depr - WCInv this is nothing what saying FCFE = NI - FCInv + Depr - WCInv +Net borrowing D is % of FCinv which was debt