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A Free Practice Test for All CFA Level II Readers

AdminAdmin Posts: 10 Sr Associate
edited May 2016 in 300 Hours

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Comments

  • Hello,

    I just took your L2 mock and am going through the debriefing. I was wondering if you could tell me where the 2,973 number for FCinv comes from? As far as I knew FCinv = Any additions for the year, and I'm getting the additions as follows:

    Opening PPE: 9,975
    Additions: 3,038
    Disposal: (65)
    Depreciation: (872)
    Ending PPE: 12,076

    Your Answer:
    Computing FCFF from net income
    Net income 1,975
    plus interest expense, after tax 356 532 * (1 - 0.33)
    Depreciation and amortization 872
    Net additions to property, plant, and equipment (2,973)
    (Increase) decrease in working capital (413) from CFS
    Increase (decrease) in deferred tax liability 26
    FCFF (157)

    Thanks!!
  • KodeesKodees IndiaPosts: 1 Associate
    Based on the values provided = Ending PPE - Beginning PPE + Depreciation
    = 12076-9975 + 872
    = 2973
  • devzdevz LondonPosts: 1 Associate
    It's also by subtracting the Disposals from the Additions: 3,038 - 65 = 2,973
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