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Hi,
In some questions we work out TAD & Deduct then add the TAD figures back in further down though in some others, TAD is not added in. Can you please advise when it should be added & when not ? Confused!
Thanks
James
As I do make clear in my free lectures on investment appraisal, the AFM examiner very often states in the question that an amount equal to the TAD will be needed to maintain the non-current assets.
If this is the case then although the TAD is not a cash flow (and so would be added back) at the same time there is an equal amount as a cash outflow (which would be subtracted). So rather than add back and then subtract exactly the same amount in arriving at the overall cash flow, we just don’t bother adding it back and don’t both subtracting.
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