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hey all, can any one please explain to me why in the example of the notes for economic value added in chapter 8. When we are adding back the interest expense we are taking the tax effect while for non-cash expenses we are adding them full without taking care of tax effect ??
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We will count in the tax effect of interest in the WACC, which is used for the calculation of capital charge. Therefore, the purpose is to avoid double count of the tax effect on interest.
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