Question
When calculating Free Cash Flow, interest payments are not included. Why is this? Also, given that the EBIT figure already has depreciation (a non-cash expense)
When calculating Free Cash Flow, interest payments are not included. Why is this? Also, given that the EBIT figure already has depreciation (a non-cash expense) subtracted out, why do we add depreciation back in after the tax calculation? If Net Working Capital (NWC) increases, why do we subtract this from Free Cash Flow?
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International Finance Theory And Policy
Authors: Paul Krugman, Maurice Obstfeld, Marc Melitz
12th Global Edition
1292417005, 978-1292417004
