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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 was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

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.