- This topic has 1 reply, 2 voices, and was last updated 7 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Difference between FCF and NPV
My question is, how is Free cash flow different from NPV calculation?
In both cases, we do the same things like calculating tax on EBIT and subtracting capital expenditure and adding decrease in net working capital and subtracting increase in net working capital and adding scrap value and depriciation. In the end, we discount it at the WACC to get the PV.
So what is the difference? I am a bit confused.
There is no difference. With NPV’s we are usually looking just at individual projects, with FCF we are usually looking at the whole business, but the thinking is exactly the same.