The calculation for FCFE makes an adjustment for Interest on LT debt (which I get) but it also has you make an adjustment as if there is a tax benefit for the $5223 of ‘Other Interest’.
Is there a tax benefit for Other Interest? I thought it was only for Interest Expense on Debt instruments. The other interest could be for anything and, as I understand, not tax deductible.
FCFE should be NI + NCC + AT Int Exp - FCInv - WCInv, Or 164497+56293+.7*20265-143579-7325=84071
The answer in the book includes the additional tax benefit for other interest of .7*5223 (or 3656) for an answer of 87728
Can someone clarify the treatment of Other Interest?