Where did depreciation go?

CFA Level II Corporate Finance
#1

I am really bothered by the ambiguos CFAI questions in corporate finance. I am not sure if it’s just me.

There are many questions need calculation of operating cash flow, typically it’s after tax. You are given the initail investment, a salvage value and a useful life. Clearly you can calculate the annual depreciation and add back to the cash flow(P73 question1). In some question, CFAI book does that. But many cases it does not care about depreciation(P79 Q 23).

Did I miss anything?

#2

On P73 Q1, you’re given the net income. To get the cash flow, you need to add depreciation back to net income (remember CF statement from FSA?)

On P79 Q23, you’re given the after-tax operating cash flows, so you don’t need to worry about depreciation.

#3

Got it. They are different. Thanks