Quick question,
assume you're starting a restaurant. You get 125k from shareholders (who claim 35% of stake) and 125k from debt. You use this money to buy all the PP&E. When doing a DCF for this business, would you deduct the 250k (Capex) from FCF in year 1, or would you exclude it, given that the money came from fundraising and not from actual business operations?
The way I thought about it was, if I spent the 250k at the beginning of the year and ended up with 50k FCF, I'd have 50k cash in hand [after interest expense], not a loss of 150k. Same thing goes on in the CF statements, 250k cash inflow from financing, and 250k cash outflow from investing, resulting in no change in cash.