• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2026 exams.
Get your discount code >>

Investment Appraisal and the post tax cost of capital

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Investment Appraisal and the post tax cost of capital

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • December 9, 2015 at 12:52 pm #289581
    Roisin
    Member
    • Topics: 14
    • Replies: 31
    • ☆

    Dear John,
    From my studies I understand that when an NPV question considers cash flow of tax deductions and allowances that I should adjust the cost of capital ( eg. tax is 25%, then i should use the discount factor of 9%.) And where tax is ignored, we use the pre tax rate.

    I have found practice questions that don’t do this tax adjustment to the discount factor so I am confused. Could you please enlighten me?

    Many many thanks for you continued support.
    Roisin

    December 9, 2015 at 1:11 pm #289590
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54820
    • ☆☆☆☆☆

    It is only the cost of debt that is affected by tax, so you can’t simply take the pre-tax WACC and then take off the tax.

    Without seeing the questions you refer to then I cannot really help more.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Kaplan CIMA Free Trial

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • mohamed0Ragab141 on Chapter 3 – Property Income and Investments – Individuals TX-UK FA2023
  • umrabano63075 on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • umrabano63075 on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • baophuong on Financial performance – Example 2 – ACCA Financial Reporting (FR)
  • CarolMakombe on Chapter 6 Tax Adjusted Trading Losses – Individuals TX-UK FA2023

Copyright © 2026 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in