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Hi
Please advise why we deduct Depreciation and add back depreciation in the NPV calculation
If you are calculating the tax payable in the actual statement arriving at the net cash flow (instead of showing the tax calculation as separate workings), then we subtract the TAD before calculating the tax because it is tax allowable. However it is not a cash flow, and so is then added back.
I do explain this in my free lectures on investment appraisal.
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