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Basic Question 5 of 7

Assume a 30% tax rate. If the depreciation amount increases by $100, this period's FCFF will ______.

A. not change
B. increase by $30
C. increase by $70
D. increase by $100
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User Contributed Comments 1

User Comment
Paulvw Alternatively, the only depreciation-affected term in the FCFF calculation from EBITDA is NCC(T).
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

explain the appropriate adjustments to net income, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation, and amortization (EBITDA), and cash flow from operations (CFO) to calculate FCFF and FCFE;

calculate FCFF and FCFE;

CFA® 2025 Level II Curriculum, Volume 4, Module 22.