Calculate NPV-Metis Jun 2012

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November 17, 2018 at 3:35 pm #485074
Harold
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To calculate the NPV, should i use PAT (PBIT – interest – tax) or PBIT?
November 17, 2018 at 5:49 pm #485091
Ken Garrett
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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
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Alright thanks!
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