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FCFF FCFE FCFF from NI = NI + Dep n  + interest*(1-t) – FC inv  - WC inv FCFF from EBIT = EBIT*(1-t) + Dep n  – FC inv  - WC inv FCFF from EBITDA = EBITDA * (1-t) + Dep n  * t – FC inv  - WC inv FCFF from CFO = CFO+ interest * (1-t) - FC inv FCFE from FCFF = FCFF – interest * (1-t) + Net Borrowing FCFE from NI = NI + Dep n  – FC inv  –WC inv  + Net Borrowing FCFE from CFO = CFO – FC inv  + Net Borrowing FCFE from target debt ratio = NI - (1 - DR)*(FC inv  - Dep n )] - [(1-DR)*(WC inv )] Q.  Compute FCFF given NI=30, dep n = 2, interest 10% of 500, tax rate 30% and CapEx + WC changes are 5.  Ans.   FCFF=30+2+50*0.7–5= 30.5 mn  Q.  Compute FCFE given NI = 30, depreciation = 2 , interest 10%of 500 , tax rate 30% and CapEx + WC changes are 5 ( in million Rs) , net borrowings = 3  Ans. FCFF = 30 + 2 + 50*.7 – 5 = 30.5m (Rs) FCFE = 30.5 – 50*.7 – 3 = 24 m (Rs) Free Cash Flow  Valuation ,[object Object],[object Object],[object Object],[object Object],[object Object]

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