hard · Principles of Finance

Which of the following is a 'common' mistake when calculating FCFF starting from EBITDA?

1. Subtracting D&A from EBITDA before applying the tax rate.
2. Including the Interest Expense in the EBITDA figure.
3. Adding back CapEx as a non-cash investment item.
4. Forgetting to add the Depreciation Tax Shield (D&A × t).

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