EBK FUNDAMENTALS OF CORPORATE FINANCE A
EBK FUNDAMENTALS OF CORPORATE FINANCE A
10th Edition
ISBN: 9780100342613
Author: Ross
Publisher: YUZU
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Chapter 2, Problem 23QP

Net Fixed Assets and Depreciation [LO4] On the balance sheet, the net fixed assets (NFA) account is equal to the gross fixed assets (FA) account (which records the acquisition cost of fixed assets) minus the accumulated depreciation (AD) account (which records the total depreciation taken by the firm against its fixed assets). Using the fact that NFA = FA − AD, show that the expression given in the chapter for net capital spending, NFAend − NFAbeg + D (where D is the depreciation expense during the year), is equivalent to FAend − FAbeg.

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EBK FUNDAMENTALS OF CORPORATE FINANCE A

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