APM METIS JUNE 2012 part b

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December 3, 2020 at 5:07 pm #597544
itsmerydham
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Sir, could you please help me to understand why they have not deducted tax benefit on interest from PBIT for the NOPAT EVA calculation even when they have a loan of 350000 ( according to additional notes) and interest is payable on it every year?
Also will it be right if we deduct tac benefit?
Hoping for response soon.
Thanks
December 3, 2020 at 6:15 pm #597550
Ken Garrett
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NOPAT:
PBIT = 262,322
Tax is at 30%
So NOPAT = 262,322 x (1 – 0.3) = 183,625.
No need for an interest or tax relief on interest adjustment as interest completely ignored.
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