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How should we treat the tax calculation if a project has a negative taxable cash flow? Should tax be “0′ or should there be a tax saving?
When a project has a negative taxable cash flow, it does not result in a tax payment but rather a tax saving, because the negative cash flow reduces the overall taxable profit of the company.
This tax saving is effectively a cash inflow for the project. It is a positive amount due to the reduction in tax payable by the company as a whole.
Not a zero!!
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