I actually have passed level 3 already but when I start to apply the knowledge I learn before, I found that studying and applying is two different thing and I really need some help
Let’s say my company buy a company for 1000 and that company have net income 100, depreciation 10, capex 30 and increase in working capital 20 for every year and now i want to calculate the payback period
someone tell me the CF is NI+Depre= 110 and somone say it should include the capex and change in working capital, that is CF = NI+Depre-CAPEX-Increase in WC, I have seem both calculation and I am not sure which one is correct.
And is the CF for payback period also same as the CF for NPV and IRR????