Fubuki (12/10)

Hi John,

I am probably about to ask a stupid question here but in Fubuki when calculating the tax, why was the tax allowable depreciation ignored but then added back once the tax figure was added to the solution?

My understanding was tax allowable dep treatment would be: the taxable cash flow – tax allowable dep = profit to be taxed. Once the profit is then taxed, the tax allowable dep is then added back to the cash flows.

Thank you.