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BPP Practice and Revision Kit - question 15 Tippletine

Ootacca3y ago
Hello, Why is the tax allowable depreciation not added back in the calculation after the calculation of the tax? Thank you
John MoffatJohn MoffatTutor3y ago#1
TAD is only added back if it had previously been subtracted in arriving at the net cash flows, because of the tax being calculated within the statement of cash flows. Here the tax has been calculated separately, so no TAD has been subtracted in the cash flows and so there is nothing to add back.
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