If depreciation is included as a line item, can I basically ignore it for FCFF & FCFE calculations? That sounded crazy to me at first, but in Schweser Practice Exams Vol2 Ex2 Q101:
Calculation for FCFF or FCEE involves subtracting: FCINV = (end FA - beg FA + dep)…which means I’m subtracting dep, and then later adding it again as a NCC. So those two net out to 0 in their answer.
So if I see dep as a line item, can it be ignored?