Calculating Fixed Capital Investment

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kos

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Can anyone confirm the correct way to calculate Fixed Capital Investment with regards to calculating FCFF and FCFE?

CFAI p152 EOC #20

FCInv = Net purchase of fixed assets = Increase in gross fixed assets (ending gross fixed assets - beginning gross fixed assets)


Schweser book 3 p 184 #22

FCInv = ending net PPE - beginning net PPE + depreciation


Both questions gave begining and ending gross fixed assets and also beginning and ending accumlated depreciation.

Any input would be appreciated.
 
ending net PPE = ending Gross fixed assets - End Depreciation accumulated
beginning net PPE = beginning Gross fixed assets - Beginning Depreciation accumulated
So End Net PPE - beginning net PPE = (ending Gross fixed assets - End Depreciation accumulated) - (beginning Gross fixed assets - Beginning Depreciation accumulated)
= Ending Gross Fixed Assets - Beginning Gross Fixed Assets - End Depreciation accumulated + Beginning Depreciation Accumulated
= Ending Gross Fixed Asset - Beginning Gross Fixed Assets - Depreciation in period
So both formulae are the same.
FCInv = Ending Gross Fixed Asset - Beginning Gross Fixed Assets
= Ending Net PPE - Beginning Net PPE + Depreciation in Period.
 
Hi, I’m also confused about this question in the Schweser challenge questions (q22 p178 and answer p184)
The FCInv as mentioned above is either:
FCInv = ending gross fixed assets - beginning gross fixed assets
Or
FCInv = ending net PPE - beginning Net PPE + depreciation
These are supposed to be equivalent but using the information in the question give very different answers.
The info available is:
*Beginning gross fixed assets =$90, ending gross fixed assets = $136
*Beginning accumulated depreciation =$30, ending accumulated depreciation =$40
*Depreciation expense =$27
The answer they give uses ((136-40)-(90-30)+27) = $63 but I am confused why using the gross fixed asset equation of (136-90) = 46 if they are supposed to be equivalent?
Can someone please help explain this?
Thanks very much
 
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