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Calculate NPV-Metis Jun 2012

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Calculate NPV-Metis Jun 2012

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by Harold.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • November 17, 2018 at 3:35 pm #485074
    Harold
    Member
    • Topics: 5
    • Replies: 3
    • ☆

    To calculate the NPV, should i use PAT (PBIT – interest – tax) or PBIT?

    November 17, 2018 at 5:49 pm #485091
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10648
    • ☆☆☆☆☆

    You have to use the relevant cash flows:

    After tax, but before interest or any tax relief on interest.

    Before interest because NPV never takes interest flows into account: the act of discounting is like doing interest in reverse.

    November 18, 2018 at 3:10 am #485103
    Harold
    Member
    • Topics: 5
    • Replies: 3
    • ☆

    Alright thanks!

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘Calculate NPV-Metis Jun 2012’ is closed to new replies.

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