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Hi John
1. is tax allowable depreciation not added back to post-tax cash flows in APV calculations?
2. could we be expected to be able to calculate gross redemption yields and the duration of bonds, in the exam? (if so, could you please remind me which lecture number has this information).
3. i know that reading the ACCA technical articles is always important. but do they always show up in the exam, in your experience?
1. The treatment of tax is the same in APV calculations as for all NPV calculations. However, as I stress in my free lectures, the examiner usually says that an amount equal to the depreciation is needed for the maintenance of the assets and so then we don’t add back depreciation.
2. Yes – you can be asked to calculate the GRY and the duration. If you look at the contents page of the lecture notes you will see that they are covered in Chapter 11.
3. Different topics are asked in each exam. Everything in the technical articles is examined sometime, but obviously not all in the same exam.
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