Question: Why is D&A first subtracted and then added back in FCF calculations?

Why is D&A first subtracted and then added back in FCF calculations?

Step by Step Solution

★★★★★

3.32 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

By subtracting DA calculating the tax obligation and then ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

141-B-C-F-C-B (467).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Q:

Why are losses added back to and gains subtracted from net income when cash from operations is calculated using the indirect method?

Q:

Why is the amortization of the acquisition differential added back to consolidated net income to compute net cash flow from operating activities in the consolidated cash flow statement?

Q:

Why is depreciation expense added back to the net income of a company to find the operating cash flow?

Q:

1. When calculating cash flow, why is depreciation first subtracted but then added back in? Because it is not a real cash outflow but does create a tax deductible expense Because it is an expense...

Q:

Can someone help with the first question on the 2nd page? Please note: Don't answer the multiple choice question on the first page. the first page is used as context for the first question on the 2nd...

Q:

The corporate tax return is known as Form 1 1 2 0 , the equivalent of individual Form 1 0 4 0 . One of the most important schedules in Form 1 1 2 0 is Schedule M - 1 , where the corporation indicates...

Q:

However, to calculate E&P, you must know how to calculate taxable income so lets first look at the differences in E&P and taxable transactions. Take a moment and view Chapter 5 Concept Summary 5.1...

Q:

Below is the assignment, attached in the excel file is actually all the answers, I need these transferred into my own excel file, answering all the questions below. Integrated mini-case: ?Working...

Q:

(1)The Statement of Cash Flows Referencing this week?s readings and lecture, describe the following terms as they relate to the statement of cash flows: cash, operating activities, investing...

Q:

i need help answering theses question(Type out answers) All the information you need are in the pictures so you will need to read them! This is my 3rd time submitting this question where yall are...

Q:

A thin-walled hollow wire of radius a lies with its axis along the z axis and carries current I in the positive z direction. A second identical wire is parallel to the first with its axis along the...

Q:

a) How work study can improve the productivity of an organization? b) Describe the procedure of work measurement.

Q:

The markup on a desk should be 3 1 % based on selling price. If the seller s cost was $ 2 4 0 , then how much should it sell for to achieve the desired markup? a . $ 3 1 4 . 4 0 b . $ 3 4 7 . 8 3 c ....

Q:

13.6 Determining the critical value of F. For each of the following situations, state how large the F statistic needs to be for rejection of the null hypothesis at the 5% level. Sketch each...

Q:

Calculate the weighted average cost of capital for a firm, explain the limitations of using a firms weighted average cost of capital as the discount rate when evaluating a project, and discuss the...

Q:

Define net working capital, discuss the importance of working capital management, and compute a firms net working capital.

Q:

Define the operating and cash conversion cycles, explain how they are used, and compute their values for a firm.

Q:

It says "Mark owns a 20% interest in a partnership (not real estate) in which his at-risk amount is $44000 at the beginning of the year. During the year, the partnership borrows $90000 on a recoursw...

Q:

QUESTIONS Vrterest id or accrued during 2018 on regate quistion deteness of million or enim formare persone con is deductible wrate de interest QUESTIONS

Q:

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on...